Addressing the need to tackle unemployment in India, corporate leaders in a closed-door meeting with Prime Minister Narendra Modi on Wednesday recommended incentivising labour-intensive industries like garments and engineering.
Sources informed that providing corporate tax concession based on the number of employees can be one option.
Other recommendations for job creation include having a system of interest-free GST loan on incremental tax payment by SMEs and reducing employee contribution to EPFO and ESI.
The meeting also discussed ways to bring about land reforms.
Recommendations include automatically allowing non-irrigated farmland for industrial purposes, introducing dedicated bankruptcy code for real estate and allowing higher floor-space index (FSI) to encourage construction.
Corporate leaders in the meeting also suggested 100 per cent foreign direct investment in the insurance sector.
Private investment has remained depressed for over five years now, and a strategy linking tax incentives to investment and jobs may work.
Reserve Bank of India data show that while the outstanding credit of scheduled commercial banks to the industry grew at a compounded annual growth rate of 2.8 per cent over the last five years from Rs 25.1 lakh crore in April 2014 to Rs 28.3 lakh crore in April 2019, the gross bank credit of scheduled commercial banks in the same period expanded by 8.5 per cent.
According to sources, the meeting was attended by Tata Sons Chairman N Chandrasekaran, Tata Steel CMD TV Narendran, Anil Agarwal, ITC Chairman Sanjiv Puri, Kotak, AMC's Nilesh Shah, KKR India CEO Sanjay Nayyar, Paytm CEO Vijay Shekhar Sharma, Credit Suisse' Neelkanth Mishra, JP Morgan's Sajjid Chinoy, Citi's Samiran Chakraborty & SBI's Soumya Kanti Ghosh.
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