A Government appointed advisory group has suggested issuance of ‘Elephant Bonds’ wherein people declaring undisclosed income will have to mandatorily invest half of that amount in these securities. The high-level panel also recommended a host of other measures that include a road map for doubling India’s exports of goods and services to over USD 1,000 billion by 2025. These recommendations are part of a report prepared by the 12-member group, set up by the commerce ministry in September last year.
The group submitted the report to Commerce and Industry Minister Suresh Prabhu on Wednesday, an official said. Suggesting amnesty-like scheme, the panel asked the Government to create ‘Elephant Bonds’ (25-year sovereign bonds) in which people declaring undisclosed income will be bound to invest 50 per cent. The fund will be utilised only for infrastructure projects, the report said.
The other key recommendations include lowering effective corporate tax rate, bringing down cost of capital and simplifying regulatory and tax framework for foreign investment funds. These are aimed at increasing India's exports of goods and services from USD 500 billion in 2018 to over USD 1000 billion in 2025. The report argued that India’s competitors have less than 20 per cent effective tax rates. Besides, the group recommended increasing capital base of EXIM Bank by another Rs 20,000 crore by 2022, setting up of empowered investment promotion agency and seeking inputs from industry and MSMEs before signing free trade agreements (FTAs) and sensitising them of its benefits.