Finance Minister Nirmala Sitharaman assured the industry that the government would review the criminal penal provisions on corporate social responsibility (CSR) contained in the recent amendments to the Companies Act.
After the new amendments, firms will have to spend on CSR, and the earlier practice of explaining to shareholders about not doing so has been discontinued.
Addressing members of the CII, the finance minister assured India Inc of cutting the corporation tax rate to 25 per cent across the board, once the government was comfortable with its revenue numbers.
Less than 1 per cent of large corporates pays corporation tax at 30 per cent, with the rest at 25 per cent.
“It is our intent to reduce tax on corporates,” said Sitharaman, emphasising that there was “no second thought” on this matter.
The government will consider a uniform 25 per cent rate for all categories of corporates once there was comfort that tax revenues were on the upward trend, she said.
Industry, on the other hand, has asked the government to make timely payments for projects it is executing, and cut the GST rate for the automobile sector.
Sitharaman added that the government will immediately take up for consideration recommendations of the task force on the direct taxes code, once it gives report on August 15. “We are looking at simplification of taxes. The government will immediately take this (DTC report by task force) up," she said.
Sitharaman also informed the CII that she will travel across the country to hear and understand tax harassment issues first-hand. In addition, a technology-driven platform will be set up wherein cases of harassment can be uploaded.
She did not rule out reviewing some milestones in relation to infrastructure. Specifically, projects with a bearing on core sectors and job creation may be brought forward.
“For instance, incentivising affordable housing is likely, given its impact on the core sectors,” she said.
“We have an atmosphere of certainty and cordiality between the RBI and the government,” said Sitharaman, adding that the current high level of synergy between the two is helping incentivise investments.
Recognising that corporates has significant outstanding from government departments and agencies, Sitharaman stated she is in the process of addressing the same.
Delayed payments to MSMEs is estimated at Rs 48,000 crore.
As the first step, the government will, of the Rs 48,000 crore, release the amount that is not under litigation, she said.
Uday Kotak, president-designate of CII, requested the minister to take bold decisions to catalyse growth.
He said: “We would like to see the economy grow faster. The areas where there is need for support across different sectors was discussed frankly and openly. She (Sitharaman) said she would consider various suggestions by CII members."
Adi Godrej, chairman of the Godrej group, said the auto sector was doing poor and clearly needs something. Ajit Gulabchand, CMD of Hindustan Construction Company, said the government was not paying adequately and on time to various projects.
Rakesh Bharti Mittal, co-vice Chairman and MD of Bharti Enterprises, said the thrust of public expenditure must rise on the infrastructure side. He said private investments are not coming because of low consumption. Most of the banks are not lending, he complained.