22 October, 2019
With euphoria over the corporate tax cut fading , the government needs to address fundamental to the economy.
Advantaged of corporate tax rate cuts:
# Increase in FDI in Indian economy
# Solution to twin balance sheet problem
# Attractive Indian market on the background of US- China trade wars
# Stimulus to Make in India
# Stock market going bullish
# Incrase in private investment and increase in employment opportunities
Demerits of corporate tax rate cuts :
1. Loss of around 1.5 lack crores to Government.
2. Decrease in the welfare activities of government.
3. Less funding to MGNREGA.
4. Corporate sector in India is not the major driver for economic growth .
How to revive from economic depression?
The major drivers of growth in India are Agriculture and its allied sectors and MSME sector. Agriculture supports livelihoods of around 50% population and also is important for food security.
So some of the steps can be :
1. Constitute 'fund of funds' to fund venture capital to MSMEs and also constitute credit guarantee fund.
2. Promote Agriculture entrepreneurship through Agri Udaan .
3. Rashtriya Gokul Mission and Animal Husbandry to promote Dry land area agriculture.
4. Infrastructure development like schools, health centers, bridges, roads ,etc.
5. Funding to MGNREGA to boost the rural demand.
6. Skill Development through PMKVY, NSDC, NSQF, etc.
If these can be implemented speedily and efficiently, then we could pull the sagging economy out of quagmire , especially in the near term and hopefully incentivize and facilitate the much anticipated spurt in corporate investment which apparently the government was aiming at while announcing the tax bonanza.
Source: THE HINDU
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