Aim is to boost private investment, says CEA

‘Corporate tax rate cut will help’

Chief Economic Adviser Krishnamurthy Subramanian on Monday said private investment was the key to economic growth and the recent cut in corporate tax rate was done to boost investments.

“Private investment is the driver of economic growth. Steps that we are taking, be it corporate tax rate cut, be it code on wages and industrial relations, is to try and create a more favourable environment for investment,” Mr. Subramanian said at the FICCI Young Leaders Summit here.

He said investment was required for sustained economic growth. “So, there is indeed well-thought out agenda in implementing these measures; the effects of these will show, ” he said.

India’s GDP growth slowed sharply to 4.5% in the July-September, hit by a slump in manufacturing output. The pace had moderated from 5% in April-June and 7% in the July-September quarter of 2018.

In September, the Centre slashed the corporate tax rate to 22% from 30%. It also lowered the tax rate for new manufacturing companies to 15% to attract new foreign direct investments.