India an attractive destination to relocate supply chains: Nirmala Sitharaman

Days after the central government slashed taxes for new domestic manufacturing companies to 15 per cent, Union Finance Minister Nirmala Sitharaman on Sunday said that India has become an attractive destination for companies to relocate their supply chains from China.

"No country in South East Asia is giving 15 per cent tax rate. India has become an attractive destination for companies to relocate supply chains from China," Sitharaman told reporters.

The Finance Minister said that the revised tax rates will come into effect for new units set up after October 1 this year, "but production should start on or before 31 March 2023."

The government had on September 20, slashed domestic corporate tax rate to 22 per cent and 15 per cent for new manufacturing units.

"It will be difficult to raise the corporate tax rates from here and if anyone wants to do that, they will have to go to the Parliament and explain the rationale for the same," she said adding that Apple and its ecosystem coming to India is a big signal for foreign companies.

The Finance Minister also ruled out any expenditure cuts."The expenditure secretary will hold weekly meetings with all secretaries to push spending by departments and public sector undertakings (PSUs) for budgeted expenditure," she said.

Sitharaman expressed hope for 100 per cent disinvestment in Air India this fiscal and said that the government will focus on 23 Cabinet Committee on Economic Affairs (CCEA) approved companies for the same.

The Air India Specific Alternative Mechanism (AISAM) is also likely to meet soon to finalise the contours.

"The government has not yet put thoughts into the personal income tax rate rationalization. We have glanced over the task force report on direct tax simplification but the detailed analysis of the report still on," she said.

"I will soon meet private sector banks to give a push to lending," she added. She also said that the fiscal deficit targets are not being revised at this stage and will take a call on the same at the financial year 2021 budget.