Corporate tax cuts to give excellent support to steel industry

The year 2019 holds out a number of surprises for the Indian economy. After the continuation of initial few good months, IIP fell from 8.4% in October 2018 to 4.3% in July 2019, primarily contributed by manufacturing sector declining from 8.2% to 2.5% during the period. The advance estimates of GDP, consumption and investment for FY19 put Q4 GDP growth at 5.8%, the lowest of the previous three quarters and for the full year at 6.8%. To top it all, the GDP in Q1 of Fy20 at 5% confirmed that something drastic must be done to get the economy back to a higher growth trajectory.

From the series of interactive sessions held by our finance minister with different groups of industry, service sector, agriculturists, financial institutions, exporters, it became clear that inadequate availability of fresh investment, much more than what can be sourced from the limited space offered by GST and other direct taxes, is the crux of all the pains and ailments. The private corporate sector was apprehensive of the return of investment being unsure of the market absorption and the declining commodity prices aggravated the turnover. The falling investment by the private corporate sector as evidenced by its share in total investment stagnant at 12-13% of GDP.