8 Important Measures to Stimulate Investment | Private Investment

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For raising the level of effective demand and the volume of employment, not only public investment is important but also private investment. Hi friends, in today’s article we are going to know about the 8 Important Measures to Stimulate Investment. So let’s discuss in details.

8 Important Measures to Stimulate Investment

To promote private investment following are the 8 Important Measures to Stimulate Investment –

• Tax concession or Reduction in Taxes – It is argued that tax concessions allowed on company and corruption profits would stimulate private investment during depression period and will work as a great incentive for new entrepreneurs.

• Increase in Government Spending – The level of investment can also be stimulated by increase in government expenditure. If government increase the level of expenditure that expenditure will be the income of the individuals in the society which intern increase or promote the level of private investment.

• Reduction in Money Rates – The private investment can be stimulated through a reduction in the discount rates and the interest rates on advances. As the central bank the money rates, the cost of credit having fallen, the business firms may be induced to secure larger advances for the purpose of investment.

• Suitable wage Policy – The classical economists advocated wage cut policy to promote private investment. Thus wage cut reduces cost and and increases profits and encourages investment and employment.

• Promotion of Research – The research may lead to new technological inventions or innovations. Thus to operate these techniques there will be need a large amount of investment.

• Peace and Security – The private investment can expand rapidly, if there are the condition of internal peace and security.

• Political Stability – A necessary condition for the expansion of private investment is the political stability in the country. In case there is instability of the government, the private entrepreneurs hesitate in setting up of new enterprises and raising investment.

• Industrial Peace – If there is peace and harmony between workers and management in different industries, there can be promotion of investment.


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