Restitution Due
The Finance Minister, Nirmala Sitharaman, has been urging India Inc to invest more and contribute to the economy. In a bid to stimulate investment, the government has implemented a series of reforms and sops, including reducing corporation tax, simplifying goods and services tax (GST) rates, and offering lower tax rates for new manufacturing companies.
In September 2019, the corporation tax was reduced from 30% to 22%, with the effective tax rate dropping to 25.6% from 34.9%. New manufacturing companies were given the option to pay tax at a lower rate of 15%, without any exemptions. The reduction in minimum alternate tax was from 18.5% to 15%.
The government has given up revenues of close to Rs 50,000 crore due to these tax cuts. However, the Reserve Bank of India projects private sector capex to increase by 21.5% in the current year to Rs 2.67 lakh crore. The intended capex for FY25 was Rs 6.56 lakh crore, and for FY26, it is Rs 4.89 lakh crore. Capex allocations for the current fiscal year are Rs 11.2 lakh crore.
Interest rates are now trending down, which could further encourage investment. Despite these incentives, India Inc's complaint about lack of demand visibility has been addressed by the government. Employee expenses for a sample of 2,361 companies (excluding banks and financials) were up just 7% in FY25 compared with a rise of 9% in the previous year and an increase of 16% in FY23.
The government has also taken steps to partner with the private sector to skill youth. The Finance Minister has called on the private sector to partner with the government in this endeavour, as India needs to create 8 million livelihoods every year, excluding agriculture.
However, it appears that very few companies have actually taken on the responsibility to increase the pool of adequate skilled labor in India. As of March, India Inc was sitting on cash to the tune of Rs 13.5 lakh crore. The government has encouraged India Inc to indicate what else they need for investment, and has urged them to reciprocate by making fresh investments.
It is worth noting that specific Indian companies that received extensive government incentives but did not use them for capacity expansion and only profited from them are not identified in the available search results.
In conclusion, the Finance Minister has been urging India Inc to invest more and contribute to the economy. The government has implemented a series of reforms and sops to stimulate investment, and it is hoped that these measures will encourage India Inc to invest and create the necessary jobs for the country's growing population.
Read also:
- chaos unveiled on Clowning Street: week 63's antics from 'Two-Tier Keir' and his chaotic Labour Circus
- Skechers Debuts First American Stores Focused on Athletic Footwear Performance
- Budget discrepancy jeopardizes highway projects' financial support
- Racing ahead in Renewable Energy Dominance: Changzhou, Jiangsu Pushes for Worldwide Renewable Energy Ascendancy
