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Reserve Bank of India’s (RBI) annual report 2019-20 has predicted a bleak future for the Indian economy in the coming days. According to the report, both consumption and capital expenditure have been hit hard due to the ongoing pandemic, which is bound to hamper growth. Now, bringing the economy back on rails is not the job of the government alone. From the general public to corporate sector, everyone will have to stand solidly beside the government to jump over the present economic hurdle posed by Covid-19. For example, common people will have to spend as much as possible to strengthen the economy. RBI report has found that this particular group is hesitating in spending money fearing an uncertain future. It has been found that at least 40 per cent of the money that the government had given to the people to face the situation arising out of Covid-19 pandemic, had not been spent. The money has been kept to meet future challenges.
The common people and the corporate sector are not contributing towards the revival of the Indian economy. RBI report has stressed that the much awaited corporate tax cut has failed to yield expected dividends. The move was aimed at attracting investments. But the corporates used the financial benefit for debt servicing and building-up of cash balances. So the purpose virtually stands defeated. It shows the apathy of corporates towards nation building. Instead of making the country economically strong, they are simply trying to strengthen their positions. Often, the corporates alleged high tax regime is the cause for India’s low growth rate. But, none came forward to ensure a good growth rate when the taxes were lowered. The government had announced a tax cut anticipating the excess money to be invested either in the same business or in a new venture. But the corporates spoiled the plan for their own interest. In the future, the government should be cautious in extending any help to corporates until they ensure reciprocation.
There is no denying that Covid-19 has created havoc all over the world. There is not a single sector which has not been affected by the pandemic. Naturally, it has lowered the confidence level of the people, as the future looks uncertain and full of hardships. So, they are trying to prepare themselves for the impending danger by cutting their expenditure wherever possible. But the same logic cannot be applied about the corporates. Their responsibility towards society is much more than an ordinary person. They are duty-bound to fully utilise the benefits that the government has extended to them. If they don’t, it should be returned to the government. But it appears as though they are first accepting benefits and later using them for different purposes, which is a crime. So, the government is well within its right to withdraw the tax benefits announced for the corporates. The government took a huge financial burden on itself when the said relief was announced. Now, the common people cannot be asked to share the burden on behalf of the government. The burden should be shared equally by the corporate sector. Otherwise, the corporate sector will be failing to perform its duty towards the nation.