Revamping Tax Framework: A Boost for Foreign Investments

Experts urge the government to simplify tax laws and ensure tax neutrality in the upcoming Budget to enhance foreign direct investments. They also emphasize the need for fiscal consolidation, deregulation, and strategic investment in key sectors like defense, e-commerce, and advanced manufacturing to strengthen India's economy.

In anticipation of the forthcoming Budget, experts are advocating for a simplification of tax laws and ensuring tax neutrality in cross-border reorganizations to attract foreign direct investments. Reducing the cost of capital has also been suggested as a crucial step by analysts.

Economists emphasize the need for the budget to outline a credible plan for fiscal consolidation and debt reduction. Rudra Kumar Pandey, a partner at Shardul Amarchand Mangaldas & Co, highlights the importance of recalibrating the tax framework to foster growth, enhance compliance, and boost citizen purchasing power.

The focus remains on strategic investment in sectors like defense, e-commerce, and advanced manufacturing, to support India's ambitions for economic diversification. Improving the utilization of free trade agreements and easing business operations are seen as essential measures for attracting foreign capital.

(With inputs from agencies.)