‘₹40,000 crore of tax stimulus may reach banks’

India’s top Finance ministry official on Monday urged India Inc. to inculcate the ‘animal spirit’ and ramp up investments, even as the government expects about ₹40,000 crore to ₹45,000 crore of the ₹1 lakh crore income tax bonanza announced in the Union Budget to be saved by taxpayers in banks which could boost credit flows to industry.

“Adam Smith had something in mind, when he said animal spirit. He didn’t say human spirit, because the human mind goes off and on, it’s sometimes unpredictable and it could be moody. And therefore, when he said, we have to revive the entrepreneurial spirit, he says, revive the animal spirits in you,” Finance Secretary Tuhin Kanta Pandey told CII members.

“That means an animal is someone free from all these bonds of [fretting about] ‘What will happen? What will this thing mean?’ and do too much of calculation. I’ll encourage the industry to inculcate that animal spirit in you and try and invest. Some of you have been waiting… I think the time to plunge is now. Any pain points, please get in touch with us, we are ready to resolve,” Mr. Pandey added.

Financial Services Secretary M. Nagaraju said the expected spurt in bank deposits due to the tax cuts can enhance lenders’ credit flows to entrepreneurs and spur job creation.