FM Sitharaman exhorts India Inc to open up their purse for sustained growth

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New Delhi, February 5

Finance Minister Nirmala Sitharaman on Saturday exhorted India Inc to take advantage of announcements made in Budget and "quickly" step up capex so that the virtuous cycle of investment gathers momentum.

Addressing members of CII, she said increase in capex in the Budget was done with twin objectives of supporting sustained growth and crowd in private investment.

She asserted that this is the right time for investment and industry should not lose this opportunity.

"Post the pandemic with all the reshuffling happening, reset happening in the ways in which you do your business and also with that step of October 2019 in which that one condition was please start reducing by March 2023 is also now extended by one more year," she said.

The Budget 2022-23 presented on February 1 proposed that the concessional 15 per cent corporate tax rate would be available for one more year till March 2024 for newly incorporated manufacturing units.

The government in September 2019 slashed corporate tax rate for companies that do not avail of any tax incentive, to 22 per cent. New manufacturing companies have to pay at an even lower corporate tax rate of 15 per cent.

The government slashed corporate tax rate to provide incentive for the private sector to ramp up investment which was muted for last few years. However, this got further aggravated with the outbreak of the Covid-19 pandemic.

Stressing that many sectors have been opened up, she said, there are immense opportunities in the sunrise sectors and New Age sectors like bulk drugs vaccines, and genome.

"Do sit back and calmly take a call. India needs all the expansion in capacity and it is that which is going to kick off the virtuous cycle.

"I would just want to green flag those areas before you and call upon the industry to quickly join and help the virtuous cycle to gain traction. The government has not given up its investment in infrastructure and that's going to have a bearing on the core industries directly and soon," she said.

The government has hiked public investment by as much as 35.4 per cent to Rs 7.5 lakh crore or 2.9 per cent of the GDP in the Budget 2023-24.

She urged industry not to lose this opportunity for India to reach a higher level of industrialization and manufacturing in India.

The global arena is getting opened up where global value chains are not going to be concentrated in one geography but are relocating to countries with rule of law and English speaking people.

"India fits into that very well and industry should take advantage of this global shift," she added.

Speaking on the issue of rural distress, she said, that the same was being addressed in multiple ways. The budget has enabled access to tractors and other farm equipment through rentals as well as making credit available.

The government has ensured availability of nutrients and fertilisers at affordable prices, despite the increase in global prices, she said, adding, multiple welfare schemes have provided support for housing, cooking gas, electricity, healthcare etc.

Responding to the lower allocation to MNREGA as compared to the revised estimates of last year, she clarified that the Budget allocation this year has been pegged at the allocation last year, and as the scheme is demand driven, higher allocation would be provided as per the demand.

The Finance Minister said there is need to be watchful of the increases in interest rates in developed countries and the high commodity prices.

On the privatisation of the two public sector banks and one general insurance company, as suggested in last year's Budget, she said the government is committed to taking forward the announced privatisations.

The Tribune