Seeking to jolt the economy . . .
India’s Finance Minister, Nirmala Sitharaman (the first woman to hold the post), has tabled the Bharatiya Janata Party (BJP) government’s budget for 2019, about six weeks after the party won a supermajority in the Lower House. In an effort to quickly catalyze economic growth, the budget proposes several tax reductions, such as on loans for affordable home purchases and electric vehicles, and includes lowering the corporate tax rate for companies with revenues of up to C$76 million. The budget also includes provisions for women’s entrepreneurship and safe drinking water.
Significant emphasis on FDI. . .
To achieve Prime Minister Narendra Modi’s promise of a $US5 trillion economy, Sitharaman announced the first significant reform in two decades to Foreign Direct Investment (FDI) in India. The changes include allowing 100 per cent foreign ownership of insurance companies and brokerages (previously 49 per cent) and permitting 100 per cent ownership of retail companies without restrictions on domestic procurement.
Spotlight on manufacturing . . .
The Indian government’s goal is to attract investment in mega-manufacturing plants at a time when several large multinationals are looking to move production away from China. Provisions in the new budget are geared towards attracting FDI, particularly in the semiconductor and electric vehicles sectors. The new budget even offers an extra tax break for the purchase of cars that are made in India, in an effort to attract a new wave of automakers to the world’s second largest vehicle market.
- LiveMint: Top 10 takeaways from Nirmala Sitharaman’s budget 2019 speech
- Nikkei Asian Review: India to ease foreign direct rules in push for US$5 trillion economy
- The Times of India: Finance Minister Nirmala Sitharaman presents Union budget 2019: Highlights