Five per cent cut in corporate tax can spur investments: Assocham

The upcoming Budget should look at incentivising investments into the country, and measures such as a cut in corporate tax rate could bolster sentiments for investing in the Indian economy, a top industry chamber said on Friday.

Incentives are a must, apart from steps to encourage foreign direct investments in the country, according to Assocham.

“There is a need for investments in the industry, therefore, certain measures like a 5 per cent cut on the corporate tax can be helpful,” said Balkrishan Goenka, President, Assocham.

The chamber said that the liquidity crisis has impacted lot of sectors.

The members of Assocham have therefore suggested that there is a urgent need to focus on the liquidity crisis.

“Post the dismantling of Foreign Investment Promotion Board, there is no nodal agency now, and overseas companies who come to India for FDI have to go through various departments. So, we have suggested that a desk be set up for major FDI-contributing countries,” added Goenka.

Real estate

Since there is a lot of unsold inventory of real estate units available in the market, the industry body also recommended that a five-year scheme be introduced, under which developers can get an option to rent out the unsold inventory, with the income taxed at 10 per cent.

With this, a lot of unsold inventory can be put to use.

The chamber also talked about the need of a rental housing practice in the country.

“No country in the world does only ownership housing. Therefore, it has been our proposition that rental housing should also be given a chance,” said Niranjan Hiranandani, Senior Vice-President, Assocham

Even in the US, 50 per cent of the housing is focussed on rental housing.

The need of the hour is to introduce a National Rental Housing Policy in India, he said.