Finance Minister Nirmala Sitharaman, addressing the Southern India Chamber of Commerce and Industry in Chennai on Thursday, called on Indian industries to invest in expanding their capacity to meet India's growing needs. She emphasized the government's support through production-linked incentives and the corporate tax rate cut since 2019, encouraging businesses to seize this opportunity.
Sitharaman highlighted that credit availability is no longer a constraint, positioning India as a leader in emerging industries and sunrise sectors. She noted that despite the corporate tax cut in 2019, industries were slow to invest due to the onset of the Covid-19 pandemic, which delayed recovery.
Government's Support for Industry Growth
The corporate tax rate was reduced in September 2019, with the base tax for existing companies cut from 30% to 22%, and for new manufacturing firms from 25% to 15%. Despite a revenue loss of over Rs 1 trillion in 2020-21 due to this tax cut, the government remains committed to fostering industrial growth.
Additionally, three Employment Linked Incentive schemes, announced in the Union Budget 2024-25, aim to create jobs and skill opportunities for 410 million youth over five years, backed by a central outlay of Rs 2 lakh crore. The government has also allocated Rs 1.95 trillion to boost production-linked incentives across 14 sectors.
No Friction Over GST
In another event, Sitharaman dismissed rumors of tension between the Centre and states over GST, reaffirming that the federal structure within the GST framework ensures cooperation. She emphasized that both the Centre and states are working collaboratively to promote development and broaden the tax base.
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