Lok Sabha Question No. 5 (STARRED), answered on 2019-11-18
Subject: Increase in Investment
Ministry: FINANCE
Asked by: Kani K. Navas, Balubhau (Alias Suresh Narayan) Dhanorkar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## STARRED QUESTION NO. 5

TO BE ANSWERED ON NOVEMBER 18, 2019

## INCREASE IN INVESTMENT

## *5. SHRI K. NAVASKANI:

SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

Will the Minister of FINANCE be pleased to state:

- (a) the reasons for the slump in the Gross Domestic Product (GDP) to an all time low of 5 per cent in the April-June quarter; and
- (b) the steps taken by the Government to ensure an increase in investment in India?

## ANSWER

THE FINANCE MINISTER (SMT. NIRMALA SITHARAMAN)

- (a) to (b) A Statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO THE LOK SABHA STARRED QUESTION NO. 5 BY SHRI K. NAVASKANI  AND SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR DUE FOR ANSWER ON NOVEMBER 18, 2019

- (a) As per the National Statistical Office (NSO), GDP growth on average was 7.5 percent in 201419, which is the highest amongst G-20 countries. The World Economic Outlook (WEO) of October 2019, 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.  Government  has  been  taking  several  measures  to  address  moderate levels  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.
- (b) During the last five years, government has implemented major reforms to build the investment climate in the country for becoming a US 5 trillion-dollar economy. Introduction of Insolvency and Bankruptcy  Code  (IBC)  in  2016  is  a  significant  step  towards  cleaning  and  strengthening  of  the financial system of the country. Implementation of Goods and Services Tax in 2017 stands out as the most important measure for improving ease of doing business in the country. Make-in-India programme  is  a  major  initiative  towards  increasing  the  indigenous  capacity  of  the  country  to produce  world  class  goods  and  services.  Continuous  liberalization  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  government  has  cut  corporate  tax  rate  from  30  percent  to  22  percent  to  boost investment activity in the country. In particular, the corporate tax rate has been cut to 15 percent for  new  domestic  manufacturing  companies  which  is  amongst  the  lowest  in  the  world.  This

complements a cut in the repo rate by 135 basis points during 2019 by the Reserve Bank of India and mandating of banks to link their lending rates with external benchmarks for reducing the cost of capital for investors.

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