BUDGET FAILS TO ADDRESS KEY INVESTMENT CONCERNS

Why in the news?

Despite corporate tax breaks and increased government capex, private investments remain sluggish.
Economic Survey highlights a shift towards investments in buildings rather than machinery or intellectual property.

About Corporate tax:

Definition: Corporate tax is levied on a corporation’s net income, which is revenue minus expenses (G&A, marketing, R&D, depreciation).
Rate Structure: Based on a slab rate structure per the Income Tax Act of 1961; varies by country.
Effective Rate: Often lower than the statutory rate due to deductions, subsidies, and tax loopholes.
In India: Corporate tax applies to profits, rental income, capital gains, and other sources. It is payable by both domestic and foreign companies.

source:slideserve

What is Capital Expenditure(capex)?

Definition: Funds for acquiring, constructing, or improving physical assets (infrastructure, buildings, machinery).
Purpose: Enhances economic growth, productivity, and employment.
Allocation: Included in the annual budget by the finance minister.
Growth: Three-year consecutive increase; Rs 10 lakh crore, 3.3% of GDP, 33% growth (Union Budget 2023-24).

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