India Is As Competitive For Investment As Any Other Economy: Chief Economic Advisor

Dr Krishnamurthy Subramanian, Chief Economic Advisor, Government of India said that investment is the key driver for sustained growth and reforms that we are seeing today is an articulation of a cogent vision that essentially has investment, and especially private investment, at its heart. Dr Subramanian said that in order to attract more investments, the tax rate becomes extremely crucial, especially on the corporate side. He said that tax rate cuts are necessary but not necessarily sufficient conditions for attracting investments because investors look at after-tax returns. "Now India is as competitive for investment as any other economy. India is a much larger economy as it has a much bigger labor force and much bigger market," said Dr Subramanian.

He added that disinvestment of a profitable company like BPCL reflects a change in the way government views disinvestment and privatization. "The private sector does a far better job of taking the savings of the economy and plowing it back in the form of taxes and job creation. The public sector can then use it to serve and do welfare," said Dr Subramanian. Highlighting the importance of human capital in education, Dr Subramanian stressed upon the need for more research and urged the corporate sector to invest more in research. "It is important for the corporate sector to understand this intrinsic feature of research and encourage and invest in it," he said.

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