Amid concerns about the crisis in the Indian economy following GDP growth slipping to a 26-quarter low of 4.5 per cent in July-September, Finance Minister Nirmala Sitharaman Tuesday said the government is open to further reforms for making India a more attractive investment destination.
Addressing India-Sweden Business Summit with Minister for Business, Industry and Innovation of Sweden Ibrahim Baylan, in New Delhi, Sitharaman said the government has taken various steps, including reduction of corporate tax.
In the biggest reduction in 28 years, the government in September reduced the corporate tax rate by almost 10 percentage points in a bid to give a boost to sagging economy.
Inviting Swedish firms to invest in infrastructure development projects in India, the Finance minister said, “I only can invite and assure that the Government of India is committed to further reforms in various sectors whether it is banking, mining or insurance and so on. India plans to invest about Rs 1 lakh crore in the infrastructure sector in the next five years.”
“We are going through a phase of responding to challenges Indian industries are facing. Before budget 2020, we took a call that fiscal rewarding step we had to project didn’t have to wait. The corporate tax cut was taken between two budgets.” she added.
Base corporate tax for existing companies has been reduced to 22 per cent from 30 per cent, and for new manufacturing firms incorporated after October 1, 2019 and starting operation before March 31, 2023, it was slashed to 15 per cent from 25 per cent.
On Saturday, Sitharaman said about 12 global companies have evinced interest to shift their base from China to India, taking advantage of the competitive tax rate of 15 per cent announced recently.
“I had said that I will form a task group, which will look into those companies which want to get out of China, and in the meanwhile I announced the corporate tax cut. There were many companies which were showing interest and wanting to come back. So, this task force has already started contacting many of these companies. The last count, I came to know was about 12 of them have already been spoken to, their minds understood, their expectation listed out so that the government can come up with a concrete offer for them to shift from where they are now, so that the ecosystems can get built here, new industries can come,” she had said.
Owing to a deceleration in manufacturing output and subdued farm sector activity, India’s GDP growth slipped to a 26-quarter low of 4.5 per cent in the second quarter (July-September) of the current fiscal, data released by National Statistical Office (NSO) on Friday showed. The GDP growth rate has now slowed for the sixth consecutive quarter, with the previous low recorded at 4.3 per cent in March 2013.