Indian economy will soon bounce back from its worst showing in 11 years as a steep cut in taxes will help attract investments and the massive infrastructure spending revives economic activity, mining baron Anil Agarwal said. Besides spending on building infrastructure, the government should focus on exploiting natural resources the country has and look at stake sale in most PSUs.
Public sector firms have the potential to produce three-times more than the current output and should be operated independently, he told here.
“I think it (economy) will bounce back. It has tremendous potential. I see light at the end of the tunnel, it is not far. The economy will kick start soon,” he said adding the rollout of Goods and Services Tax (GST) had a temporary impact but it is being straightened now.
Indian economic growth plunged to an 11-year low in the July-September quarter when it clocked 4.5 per cent expansion. The government has forecast a 5 per cent GDP growth for the full 2019-20 fiscal that ends in March but many experts believe the growth rate will be lower than the projection.
Agarwal, the founder and chairman of Vedanta, said the government cutting tax on companies to the lowest in the world will attract investment but companies need a little hand-holding to see their projects through.
“India has the lowest tax in the world and a natural place for investments to come in. If somebody wants to do business in a democratic country, India is the best place,” he said.
The government in September last year cut the corporate tax rate to 22 per cent from 30 per cent and in the budget for 2020-21 announced reduction in personal income tax rates for those who were willing to give away present exemptions and rebates.
“When you start a project anywhere in the world, the government makes sure the project is completed. In India, you are left alone.”