Tax incentives by govt to boost manufacturing, shipments: Exporters

Tax incentives announced by the government will significantly boost investments, manufacturing and shipments in different sectors such as leather and footwear, exporters said on Friday.

Council for Leather Exports (CLE) Chairman Pararuna Aqeel said the series of direct tax incentives announced by Finance Minister Nirmala Sitharaman will boost growth, investment and innovation in the sector.

"As about 92 per cent of the leather and footwear industry is concentrated in MSME segment. Lower tax slabs hold the key to achieve the envisaged growth and investment levels," he said in a statement.

In the biggest reduction in 28 years, the government on Friday slashed corporate tax by almost 10 percentage points as it looks to pull the economy out of a six-year low growth and a 45-year high unemployment rate by reviving private investments with a Rs 1.45-lakh crore tax break.

 

World trade information provider Connect2India said the move would give a big push to the 'Make In India' initiative, attracting investment as well as generating new employment opportunities.

"Lot of Indian products, including from MSMEs, have excellent quality; in a globally competitive market, the tax cut should help companies manufacturing these products become price competitive also, thus encouraging and increasing the export share of these products," said Pawan Gupta, founder and CEO of Connect2India.

He also said the CSR spends on IITs and NITs should aid innovation which is the need of the hour.

Driving MSMEs towards becoming globally competitive would be imperative in creating a long-term growth strategy for the sector and the recent announcements are positive steps in that direction, Gupta said.

Sharing similar views, Federation of Indian Export Organisations (FIEO) Presdient S K Saraf said the timely move would help in attracting investment from companies in China that are looking for new destinations for expansion or starting a new venture with an eye on the US market.

"It will encourage investment in the existing domestic companies also giving them the scale to cater to the huge market of US and China," he said.