Budget 2019-20: Spurring growth and generating more jobs and this might be the key focus of her maiden budget.
The Narendra Modi government may push tax rebates for the companies which make capital investments and generate employment, The Indian Express reported citing unidentified sources. The government understands the need to boost private sector investment and job creation and hence there is a likelihood that tax sops could be announced. “This will incentivise the industry and with capex coming in, that in itself will kick in demand,” the newspaper reported.
Newly appointed Finance Minister Nirmala Sitharaman faces the dual challenge of spurring growth and generating more jobs and this might be the key focus of her maiden budget. While the government is itself financially constrained to spend more, it can still enthuse private companies to invest more by wooing them with tax reductions. Recently, FICCI president Sandip Somany had also written in the national daily that a new taxation framework can be ushered which will link investment and employment. He had proposed that the government gives 2% relaxation in corporate tax to those companies which create employment for 250 to 499 workers.
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The rebate should be for the next five years and this should begin from the date of commissioning of the plant, he had written. Similarly, a rebate of 3% to those who generate employment for 500 to 749 people could be allowed and those who make jobs for 750-999 workers can be given a rebate of 4%. Also, 5% relaxation can be allowed to the companies who generate more than 1,000 jobs. “This will rejuvenate the investment scenario by rewarding employment-generating companies and help the government in achieving both its immediate objectives — reviving investment and creating jobs,” Sandip Somany wrote in The Indian Express.
Source: Financial Express
