Mumbai, August 9: With Indian Economy tumbling and reports of Foreign Portfolio Investors (FPI) exodus plunging, Finance Minister Nirmala Sitharaman on Friday chaired industrialists' meeting and heard their concerns. Among the major outcomes that came out was which the industrialists stated was that the government should roll back foreign portfolio investment surcharge soon.
According to the minutes shared by the industrialists, the Union Finance Minister heard views about different sectors of the economy with an open mind and assured that she would consider the suggestions made. Apart from this, she wanted the industrialists to make investments across Jammu and Kashmir. Economic Crisis in India: Nirmala Sitharaman Mulling Exempting FPIs From Higher Taxes, Says Official
About the recommendations made, chairman of Godrej Group. Adi Godrej, said, as quoted by Money Control, "Several things need to be done. The economy has slowed down. Unfortunately, the budget didn’t have too many provisions of reviving the economy. Now it is clearer and I hope that the government does something."
On FPI exodus, Godrej said, "Maybe it was best if it is never done but now that’s done and gone. Now we do not need to correct the situation and then we have to see whether the economy picks up." He maintained that the market would be reassured to a certain extent, if FPI tax rollout is made by the Union government.
Kotak Mahindra Bank's managing director stated, as reported by CNBC-TV18, "Support and boost across different sectors were discussed pretty frankly and openly and she heard patiently and also said that she will consider various suggestions which have been made by members at Confederation of Indian Industry (CII)".
Adding more, "The Finance Minister did mention that the foreign portfolio investments (FPIs) are meeting this afternoon and she has promised a fair and patient hearing to the comments and views of the FPIs in the broader context of capital markets and the economy." Nirmala Sitharaman Claims Modi Govt Taking Steps to Improve Falling Indian Economy, Says 'Ready to Hear From FPIs on Any Issue'
Earlier on Thursday, an official in the Foreign Ministry stated that Centre is looking at various aspects of decreasing the additional tax on FPIs - mainly registered as trust - from the increase in surcharge on super-rich taxpayers. Also, Sitharaman had stated that she is ready to hear from FPIs on 'any issue'.
According to the Union Budget 2019 - read out by Sitharaman in Parliament on July 5 - had provided for increased personal income taxes on those with an annual income of more than 20 million rupees (USD 283,045). Soon after this, reports started pouring in that FPI exodus began in the country and economic declined. Indian Economic Slowdown Hits Auto Sector, Over 3.5 Lakh Employees Laid Off Since April 2019
It is to be known that the jobless rate rose to 7.51 per cent in July 2019 from 5.66 per cent a year earlier, according to private data group CMIE. It might sound even surprising that auto sector - which contributes more than 7 per cent of country's GDP - is facing one of its worst downturns in decades, affecting more than 3.5 crore people directly and indirectly.