Finance Ministry exhorts India Inc to open up their purse for sustained growth- The New Indian Express

Through PTI

NEW DELHI: Finance Minister Nirmala Sitharaman on Saturday urged India Inc to take advantage of announcements made in Budget and “rapidly” increase capital expenditure so that the virtuous cycle of investment gains momentum.

Addressing ICN members, she said the increase in capital spending in the budget had been done with the twin objectives of supporting sustained growth and attracting private investment. She said now was the right time to invest and the industry should not lose this opportunity.

“After the pandemic with all the reshuffles that are happening, the reset is happening in the way you do your business and also with this October 2019 milestone that this condition was in, please start reducing by March 2023 is also now extended for one more year,” she said.

The 2022-23 budget presented on February 1 proposed that the concessional 15% corporate tax rate be available for an additional year until March 2024 for newly incorporated manufacturing units.

In September 2019, the government reduced the corporate tax rate for companies that do not benefit from any tax incentives, to 22%. New manufacturing companies must pay an even lower corporate tax rate of 15 percent.

The government has reduced the corporate tax rate to encourage the private sector to increase investment which has been subdued in recent years.

However, it got even worse with the outbreak of the COVID-19 pandemic.

Pointing out that many sectors have been opened up, she said, there are immense opportunities in emerging sectors and New Age sectors such as bulk vaccines and genome.

“Sit down and calmly take a call. India needs all the expansion of its capacity and this is what will start the virtuous circle. I would just like to flag these areas in front of you and call on the industry to join quickly and help the virtuous circle to gain momentum. The government has not given up on its investments in infrastructure and this is going to have a direct and soon impact on basic industries,” she said.

The government increased public investment up to 35.4% to Rs 7.5 lakh crore or 2.9% of GDP in the 2023-24 budget. She urged the industry not to miss this opportunity for India to achieve a higher level of industrialization and manufacturing in India.

The global arena is opening where global value chains will not be concentrated in one geographic area, but will relocate to countries where the rule of law prevails and where English speakers are present. “India fits very well into this and the industry stands to benefit from this global shift,” she added.

Speaking on the issue of rural distress, she said the same is being dealt with in many ways.

The budget allowed access to tractors and other agricultural equipment through rental as well as the provision of credit.

The government has ensured the availability of nutrients and fertilizers at affordable prices, despite rising global prices, she said, adding that multiple social protection programs provided support for housing, gas cooking, electricity, health care, etc.

Responding to the lower allocation to MNREGA compared to last year’s revised estimates, she clarified that this year’s budget allocation was indexed to last year’s allocation, and as the program is focused on request, a higher allowance would be provided as requested.

The Minister of Finance said that attention should be paid to interest rate increases in developed countries and high commodity prices.

Regarding the privatization of the two public sector banks and a general insurance company, as suggested in last year’s budget, she said the government was committed to moving ahead with the announced privatizations.

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