The Ministry of Trade plans to offer tax holiday to encourage companies to bring new investment, that will support the government to boost the COVID-19 pandemic hit economy.
The Ministry of Finance is evaluating a proposal to give 10-year tax exemption to companies making a fresh investment of over $500 million, as per the news agency Bloomberg.
The report also said that under this proposal companies will need to start operations within three years from June 1, and will cover sectors such as medical devices, electronics, telecom equipment, and capital goods.
It also points out to another program that includes a four-year tax holiday. This will be given to companies that invest over $100 million in labour-intensive sectors like textiles, food processing, leather, and footwear. Also, a lower corporate tax rate of 10 per cent for the next six years has ben proposed.
The Ministry of Finance has to take a decision on this and give approval.
To make the proposal even more attractive for the investors and for the economy from wrecking the government is offering – easy access to land for factories leaving China, tax breaks for new plants. Asia’s third-largest economy is hurtling toward its first full-year contraction in four decades as India has so far failed to provide a big stimulus, given the government’s limited fiscal room, even as an estimated 122 million people lost jobs in April and consumer demand evaporated.
The benefits provided would be in addition to the existing incentives provided by the government, reports Bloomberg.
It also reports that the top 50 industries identified by the trade minister for improving their existing infrastructure, testing labs, and research and development amenities. While the thrust is on developing sectors such as textiles, pharma, food processing, and gems and jewellery, the ministry is also working on expanding the list to include services sectors such as tourism.
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