In the run-up to budget 2020-21, PM Narendra Modi met the top industrialists of the country to brainstorm ideas to strengthen the GDP that has plummeted to the lowest levels in the six-years.
PM meets industrialists
PM Modi called Reliance chairman Mukesh Ambani, Tata patriarch Ratan Tata, Mahindra Group chairman Anand Mahindra, telecom boss Sunil Bharti Mittal, Gautam Adani and others to hiss office to discuss the economic condition of the country and find ways to boost the economy that has dropped to 4.5% according to the latest GDP data of July-September quarter. Also, the slump in the manufacturing sector and consumption played a crucial role in slowdown.
Measures taken to check slowdown
• Corporate tax slashed to 22% from 30% in September
• The tax rate for new manufacturing units was also slashed to 15%
• Bank recapitalization
• Merger of 10 public sector banks into 4
• Support for auto industry
• Plans for infrastructure projects
• Tax benefits for startups
Corporate tax was reduced to attract foreign direct investment. With these deductions, India became on par with other Asian countries. Also, RBI eased policy rates in the last year in a series of rate cuts since February 2019.