India is working on offering production-linked incentives for up to five sectors to boost domestic manufacturing, a top Finance Ministry official said on Thursday, bolstering efforts to attract new investments in the pandemic-stricken economy.
Asia’s third-largest economy is expected to contract by as much as 10% in the current fiscal, some private economists estimate, after the outbreak crippled business and consumer activity since late March, compared to the government’s earlier target of about 6% growth.
The government has announced a raft of measures including credit guarantees of ₹3 lakh crore on loans to small businesses. Tarun Bajaj, Economic Affairs Secretary at the Ministry of Finance, told a conference that incentives would be offered to sectors to push manufacturing and help struggling industries. He didn’t specify the sectors that may be eligible for incentives.
The government earlier announced production-linked incentives for large-scale electronic goods makers for five years, to attract investments in mobile phone manufacturing and electronic component units.
Incentives have also been announced for pharma firms for production of bulk drugs and medical devices.
Speaking at a virtual conference organised by the Federation of Indian Chambers of Commerce and Industry on Thursday, the official said the Centre was expecting a ‘V-shaped’ economic recovery beginning next fiscal year.
