The government has brought in major reforms to boost investment climate in the country for becoming a USD 5-trillion economy, Finance Minister Nirmala Sitharaman said in Parliament on Monday.
"During the last five years, the government has implemented major reforms to build the investment climate in the country for becoming a US 5 trillion-dollar economy. Introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 is a significant step towards cleaning and strengthening the financial system of the country," she said in the Lok Sabha.
The finance minister was replying to questions in the Lok Sabha whether the government has analysed reasons for economic slowdown in the country; analysis of impact of GST and if any study has been conducted on impact of the implementation of the foreign trade agreement.
Sitharaman said India's gross domestic product (GDP) growth during 2014-19 averaged 7.5 per cent, which was the highest among G-20 countries.
The IMF's World Economic Outlook (WEO) of October projects a significant slowdown in world output and trade in 2019. Yet, India, despite some recent deceleration of GDP growth, is still projected by WEO to grow at the fastest rate in 2019-20 among G-20 countries, she said.
Sitharaman said the government has been taking several measures to address moderate level of fixed investment rate in the economy, plateauing of private consumption rate and a modest export performance, with a view to increasing the GDP growth of the country.
"One of the objectives of the goods and services tax (GST) is to make India a common market with a view to sustaining a high level of GDP growth in the country. Further, in the World Bank's Ease of Doing Business 2020 Report, India's ranking improved by 14 positions to 63 in 2019 from 77 in 2018 after GST was implemented in 2017," the minister said.
The minister said the government publishes the Economic Survey on an annual basis analysing various aspects of the economy including trade agreements and state of the economy.
"The government has also been engaging with various stakeholders to understand their concerns and taking appropriate measures for the economy," she said.
Among others, the Make in India programme is a major initiative towards increasing the indigenous capacity of the country to produce world-class goods and services.
The minister said the continuous liberalisation has resulted in record and unprecedented inflows of foreign direct investment into the country.
"And all along government has kept inflation low, fiscal spending disciplined and current account deficit manageable to ensure macroeconomic stability so necessary to sustaining a healthy investment climate in the country. More recently, the government has cut corporate tax rate from 30 per cent to 22 per cent to boost investment activity in the country," Sitharaman added.
Corporate tax rate has been cut to 15 per cent, which is among the lowest in the world, for new domestic manufacturing companies.
This complements a cut in the repo rate by 135 basis points during 2019 by the Reserve Bank of India and mandating banks to link their lending rates with external benchmarks for reducing the cost of capital for investors.
The government has also extended the PM Kisan scheme to include all farmers, to boost rural consumption, the minister said.