NEW DELHI: The Centre is considering a proposal to grant up to 10-year tax holiday to companies that bring in foreign investments above $100 million. The proposal—mooted by the Niti Aayog, finance and commerce ministries, and endorsed by the Prime Minister’s Office —seeks to address the unemployment issue through FDI-driven jobs.
According to the Centre for Monitoring Indian Economy, 27 million youth between 20-30 years lost their jobs in April following the Covid-19 lockdown.“Tax holiday at this point will help the economy rebound and bring more investment into the country,” a senior member of Niti Aayog said, adding that finer details are still being worked out.
Commerce ministry officials said the proposal is for a four-year tax holiday, which may be extended to 10 years for labour-intensive sectors. The financial sector might be exempt from the tax holiday scheme, sources added. India has been trying to woo companies that seek to exit China by changing rules like slashing corporate taxes.
The Centre recently said FDI from countries sharing a land border with India will be allowed only through the approval route, a move seen as a bid to stop takeover of Indian companies by Chinese investors.
Many states including Uttar Pradesh have recently relaxed labour laws to attract foreign companies.