'Animal spirit missing from the corporate sector', says Revenue Secretary Tarun Bajaj

Revenue Secretary Tarun Bajaj today said the “animal spirit is missing” from the corporate sector while emphasising that private investments are not coming up in the economy.

For long-term sustained growth, the corporate sector needs to come forward, he said. Bajaj also said that high GST slab of 28 percent and cess on the auto sector will continue for a couple of years more. He added the GST Council is expected to look into sector specific issues as well as the issue of duty inversion in the upcoming meetings.  

Addressing a session during the CII annual meeting 2021, Bajaj enumerated the number of steps the government has taken including direct tax cut, predictable tax regime, import duty relief and production-linked incentive to boost private investment.  

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“I do not see the private investment happening as much. I want to understand what more does the corporate sector want us to do for the private investments to start. The government can spend only that much on infrastructure and for only a particular period of time. For the long-term sustained growth of economy, we want you people to come forward to invest in manufacturing and service,” Bajaj added.  

Bajaj also said that the corporate sector, at least the formal side, has shown resilience amid the pandemic and is doing better than what the government anticipated. “I see buoyant tax revenue on the back of the robust Q1 earnings. Formal sector has gained a lot which is visible in the tax revenues,” Bajaj added.   

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Bajaj however added that the revenue department is not looking at every penny. “I am okay to lose a pound if the economy is ready to give me ten pounds,” Bajaj added.  

On GST, Bajaj said the rates have come down at a macro level. “Revenue neutral rate of GST was about 15.6%. The current rate is around 11.5%, according to a study by the Reserve Bank of India. In a few sectors the rates have gone up. Sectoral issues like the inverted duty structure may be taken up in the upcoming meeting of the GST Council," he said.

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