Finance secretary calls for investment, and innovation to drive economic growth #IndiaFinance

New Delhi: While the government having returned money to citizens through tax cuts in the budget, it is now for industry and businesses to take investment risks and create institutions and jobs, finance secretary Tuhin Kanta Pandey said on Thursday.

Speaking at a post-budget interaction hosted by the PHD Chamber of Commerce and Industry, Pandey emphasized that new ideas, strategies and private investments are needed to drive the cycle of economic growth.

“We need your animal spirit to rise,” he said.

“Because when you create jobs, that creates income, and that income creates consumption and saving and that saving and investment creates further investments and the beneficial cycle flows (on).”

Pandey said the government’s focus on capital expenditure on infrastructure projects supports the supply side of the economy, and businesses, while also creating jobs.

“I hope that all of these measures will lead to a certain push to the growth against the headwinds and we would be able to not only maintain where we are as the fastest growing large economy in the world.

But we would also make that pace faster,” he said.

Economic impetus

Last week, finance minister Nirmala Sitharaman in her budget speech highlighted several measures to give an impetus to the Indian economy, which included the removal of income tax on earnings up to ₹12 lakh per annum, while also increasing capital expenditure (Capex) to ₹11.21 trillion as per the budget estimates of FY2025-26, apart from several social schemes to for the uplift of the population and the economy.

To be sure, India’s gross domestic product (GDP) growth fell to 5.4% in the September quarter, its slowest in nearly two years, on the back of a slowdown in manufacturing and consumption, and disappointing corporate earnings.

Meanwhile, the new income tax bill, which is set to be introduced in Parliament soon, will feature simplified language, eliminating long clauses, provisos, and excessive explanations, Pandey said.

This updated bill, which will replace the six-decade-old Income Tax Act, will also incorporate changes announced in the 2025-26 Budget, including revisions to tax rates, slabs, and TDS provisions.

“There will be no major policy changes. Our primary objective is to maintain stability,” he said.

“But of course, we would have incorporated all the amendments that we did in this law,” he said.

Pandey said that the new income tax bill is not trying to attempt a new thing, but it will be a different way of engagement with citizens.

“Laws are not supposed to be only meant for legal professionals. They are also meant for the citizens to understand,” he added.

The Union Cabinet is set to approve the bill in the coming days, paving the way for its introduction in the Lok Sabha, which many are expecting as early as next week.

The bill is part of a broader initiative to reform the tax system, aiming to streamline and enhance transparency in the existing structure.