To counter the recession which Indian Company is going to face, Government has opted for an alternative path of kickstarting the economy by relaxing tax measures on companies that are bringing huge Foreign Direct Investment in the Infrastructure of the Indian Economy.
One such decision has been taken by the government by providing tax exemption as per section 10 of the Income Tax Act to those foreign companies that shall boost investment in infrastructure in India by trillions of dollars thus increasing investment and jobs in the Indian economy.
For Instance, recently, The income tax department has granted/alloted tax exemption to five Singapore-based sovereign wealth funds (SWFs)—The reason being for their earnings from infrastructure investments that shall generate in the Indian economy. The five companies are Singapore’s SWFs Chiswick Investment Pte. Ltd, Dagenham Investment Pte. Ltd, Stretford Investment Pte. Ltd, Anahera Investment Pte. Ltd, and Bricklayers Investment Pte. Ltd
Putting In other words, The government is gambling on the “multiplier effect” that the “company providing infrastructure” could have on job creation and economic recovery.
The government’s projects that are in pipeline costs over Rs100 trillion. And The risks that are involved in long gestation infrastructure projects simply mean and indicate that usual lending by the bank is not enough to finance these aforesaid projects. The state-financed “National Bank for Financing Infrastructure and Development” shall lend nearly Rs 5 trillion in the forthcoming years.
