Unleash animal spirits of growth, Finance Minister Nirmala Sitharaman tells India Inc

States’ GST revenue shortfall may be lower by up to Rs 40,000 cr this fiscal

The GST revenue shortfall faced by states is likely to reduce by about Rs 40,000 crore in the current fiscal on improved collections over the past four months, an official said.

With businesses going through the reset phase after the substantial lifting of the lockdown curbs, the government hopes to make a sustained push now to draw investors.

She urged the industry to make the best of the disinvestment policy announced in the Budget.

Finance minister Nirmala Sitharaman on Saturday called on corporate India to awaken its ‘animal spirits’ and step up investments now that businesses are in a reset mode after a period of Covid-induced disruptions.

The government, she said, has already initiated steps, including a sharp cut in the corporate tax rate, and companies can take advantage of these.

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“We need capacities to be ramped up, we need expansion, we need more production of very many such products, which are so required for the economy,” Sitharaman said at an event of All India Management Association. “(After the tax cut) I have been waiting to see expansion happening, I’ve been waiting to see greater investments from private sector in India,” she said.

The government in September 2019 drastically cut the corporate tax rate to just 15% for setting up new manufacturing units in a bid to spur elusive private investments. But the outbreak of the Covid-19 pandemic dashed its plans.

Investments remain critical to the country’s resurgence story, as private consumption has been badly bruised by income losses in the aftermath of the pandemic.

Although a contraction in gross fixed capital formation substantially narrowed from 47.1% year-on-year in the first quarter of this fiscal to 7.3% in the three months through September, it still remained far below trend. Private consumption, meanwhile, shrank at a faster pace of 11.3% in the September quarter.

‘Banning cryptocurrencies would be like banning Internet in 1990s and will set India back by years’

Covid-19 has had a devastating impact on our economy leaving the majority of once-thriving industries in shambles. Crypto, on the contrary, has been generating jobs across a variety of functions in India and abroad.

With businesses going through the reset phase after the substantial lifting of the lockdown curbs, the government hopes to make a sustained push now to draw investors.

“I would now like to see private investors and private industry…coming forward with the so-called ‘animal spirits’ to show that it is possible to pull India up and keep it high as one of the fastest growing economies. It is now on your shoulder entirely,” she said.

The minister highlighted the latest, aggressive efforts towards disinvestment. The push for disinvestment in trickles has not really been so successful in spreading the ownership pattern, she said. “So, I want to have an efficient, more meaningful way in which our taxpayers’ money should be spent…The disinvestment of units or privatisation of units is not because we want them to be closed down,” she said.

She urged the industry to make the best of the disinvestment policy announced in the Budget. The government has set a disinvestment target of Rs 1.75 lakh crore for FY22. For the current fiscal, it had budgeted disinvestment revenue of Rs 2.1 lakh crore but the pandemic disrupted its plans. Earlier this month, the minister presented a Rs 34.8 lakh-crore-Budget for 2021-22.

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GeM portal expects procurement of over Rs 1 lakh cr in FY22: CEO

Goods and services worth over Rs 1 lakh crore are expected to be procured from the public procurement portal GeM in 2021-22 on account of a sharp increase in buying activities by ministries like defence and PSUs, a senior official said.