Discussions also centered on ways to facilitate doing business in India, according to official sources.
Ahead of the 2022-2023 budget, Prime Minister Narendra Modi on Friday met private equity players and venture capitalists to extract their input from attracting more capital and “promoting the reform process”. Discussions also centered on ways to facilitate this. To do business in India, according to official sources.
Among the participants were Rajan Anandan (Sequoia India), Srini Srinivasan (Alternative Cuttack assets), Gopal Srinivasan (TVS Capitals), Rinuka Ramnath (multiples), Amit Dalmia (Blackstone), Munish Verma (Softbank), Sandeep Naik (General Atlantic). , Ashley Menezes (Chris), Shantanu Navavadi (India Resort), Siddharth Bay (3one4), Angkor Gupta (Brookfield) and Mukul Arora (height).
The prime minister’s meeting signals the government’s renewed commitment to spur a “benign cycle of investment” to spur growth, as private consumption has been hit hard in the wake of the pandemic. Several startups were also in need of funding in the wake of the Covid-19 outbreak. Gross fixed capital formation grew 11% in the September quarter, but was supported by a favorable base (it had contracted 8.6% a year earlier).
Separately, Finance Minister Nirmala Sitharaman met with representatives from the services and trade sector on Friday, as part of her hypothetical pre-budget consultation exercise, the Finance Ministry also resorted to crowdsourcing ideas that could “help transform India into a global economic powerhouse with inclusive growth” . Share your ideas and be part of the budgeting process! He said in a tweet, he urged people to send in their input before the budget.
In their meeting with Sitharaman earlier in the day, the exporters sought financial support and favorable tax terms to boost the marketing initiative, reduce logistics costs and tackle the vexing problem of a severe shortage of containers globally. They also called for government intervention to develop a large local shipping line.
Sackthevil, head of the FIEO Exporters Authority, suggested that the government adopt a “double tax rebate scheme for internationalization”. This will allow exporters to deduct twice the eligible expenses incurred for approved offshore activities, including market preparation, exploration and promotion, from their taxable income, to expand their presence in the global market. A cap of $5,00,000 may be placed under the scheme so that the investment and tax deduction are limited (Singapore offers a similar facility to SME units for aggressive marketing), Sacktheville said.
Similarly, to overcome the boom in freight costs in the past early years, the FIEO has requested sufficient financial support to boost domestic container manufacturing, especially when the government targets $1 trillion in exports in the next five years, from $291 in fiscal year 21.
At the same time, the country needs to reduce its dependence on global shipping companies to cope with the “arbitrary” rise in freight rates, the exporters said, prompting government intervention in setting up a large domestic shipping company. India spent about $65 billion on transportation services in 2020, and given the abnormal increases in freight in 2021, the figure is likely to exceed $100 billion, according to a FIEO estimate.
Separately, Ministers of State for Finance Pankaj Chaudhry and Bhagwat Karad and senior officials of the Ministry of Finance held a second round of pre-budget consultations with some industry bodies and experts on infrastructure and climate change.
Industry bodies have suggested that the government go along with reform measures to maintain a growth rate of 8% or more once the favorable base effect reduces these public finances.
In its pre-budget submission, the PHDCCI Chamber of Industry has made an offer to extend the timetable allowed to start manufacturing by a new unit to take advantage of the concessional 15% corporate tax rate. In September 2019, the Ministry of Finance, while announcing a tax rate cut to stimulate new manufacturing units, said the unit would start production by March 31, 2023. PHDCCI argued that due to lower demand caused by the pandemic, it was skeptical about setting up any units new manufacture. She added that any extension of the timetable would help.
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