Finance Minister Nirmala Sitharaman on Tuesday said the government is open to further reforms for making India a more attractive investment destination. The government has taken various steps, including reduction of corporate tax, she said at India-Sweden Business Summit in New Delhi.
"I only can invite and assure that the Government of India is committed for further reforms in various sectors whether it is banking, mining or insurance and so on," she said. She invited Swedish firms to invest in infrastructure development projects. India plans to invest about Rs 1 lakh crore in infrastructure sector in the next five years.
Sitharaman-headed finance ministry is battling one of the worst economic crises the country has faced in recent history. Owing to the current state of economy, she announced several measures such as corporate tax rate cuts and relief for housing sector. According to the finance minister, "green shoots" are already visible with several foreign as well as domestic firms showing interest to invest following the corporate tax cut.
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In the biggest reduction in 28 years, the government in September slashed corporate tax rates by up to 10 percentage points as it looked to pull the economy out of a six-year low growth with a Rs 1.45 lakh crore tax break.
Base corporate tax for existing companies has been reduced to 22 per cent from 30 per cent, and to 15 per cent from 25 per cent for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023. The companies opting for lower tax rates, however, will not be entitled to claim any rebate or deductions.
The finance minister said "people are approaching" the government for fresh investment which will help in generating more jobs as well as make India a manufacturing hub in the future. On Monday, Sitharaman said the decision to reduce corporate tax will have an impact of about Rs 1.45 lakh crore on revenue collection, but it will help in bringing more funds within a year's time.
