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Bold, brilliant, bazooka: Here's what experts are saying about the Finance Minister's corporate tax cut

Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1.

ET Online|
Updated: Oct 16, 2019, 10.38 AM IST
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PTI
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The reduction in corporate tax rates follows a series of steps to boost demand and investments after growth slowed to 5% in the quarter ended June.
In a major fiscal booster, the government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.

Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1.

The reduction in corporate tax rates follows a series of steps to boost demand and investments after growth slowed to 5% in the quarter ended June. The move puts India’s tax rate on par with Asian peers and will boost efforts to attract investments as companies look for alternative destinations to sidestep supply chain disruptions from the U.S.-China trade war.
The move is being seen as a much-needed step to boost manufacturing and investment. Here's how everyone from policymakers, to industrialists and ministers are reacting:

The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve the competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians.

-Narendra Modi



With this announcement we are looking at revival of animal spirits. Liquidity, capital and sentiment is being aimed at by the Finance Minister and their revival is being is the target of the government. Markets are reacting well and this will continue.

-Vikas Khemani, Founder, Carnelian Capital


This is a brilliant move and I think this is the way forward. It will push manufacturing in India. More importantly, these are all measures to establish that the government is determined to take India forward and that it understands what is happening on ground. I believe this was the right time to introduce these measures, the RBI and government have worked together and this is the 4th booster and will revive the economy.

-Amitabh Kant, CEO, Niti Aayog


FM's announcements today will give necessary fillip to the economy which we've been hoping for. The announcement on tax will help companies like Coal India, Infosys, and Wipro. We have had a series of measures, today's measures are the largest

-Piyush Goyal, Union minister.



It is a bold step and a highly positive one for the economy.

-Shaktikanta Das, RBI Governor



This Step opens up expectations of more policy measures that would encourage investments. It'll increase the earning expectations for companies, they are staring at a straight rise in profit of almost 10%. Investors were looking for a trigger to enter the market and I'm sure this is the trigger they needed.

-Sunil Singhania, Abakkus Asset manager




This is an extraordinarily good announcement, it is the big bang reform we have been asking for it and glad that this was announced. It is a positive sign that the government is aware of what is happening and is aligned towards revival of animal spirits. It will encourage the FIIs and will bring them back to invest more. Our manufacturing companies were paying full tax now we will reinvest what we will save and that will create more jobs. The financial sector will see a good positive change. This will make India a very attractive destination for foreign investors.

-Ajay Piramal, Piramal Group



It’s a big bazooka and a very positive step, having the capability of reviving the economy.

-Vaibhav Sanghavi, co-CEO, Avendus Capital Public Markets Alternative Strategies



In a major boost to revive flagging animal spirits and position India as one of the most attractive business destinations, the government has announced a slew of measures that would act as a force multiplier for the flagging economic engine.

-Ajay Bodke CEO of portfolio management services at Prabhudas Lilladher.


Reduction in corp tax rate welcome, doubtful whether investment will revive

-Jairam Ramesh, Congress


Corporate Tax Rate Cut From 30% To 25.2% To Spur Growth- this is a great move which will firmly revive growth n investment. My hats off to FM for this bold but most needed move.

-Kiran Mazumdar Shaw


There cannot be a better day for India than what has happened today, it is amazing what a bold move by Sitharaman and Modi government. What they have done has not happened anywhere in the world but again I am saying public sector, public sector banks (need to) reduce the holding of government to the 50% and then see what happens, India will be on a very different level.

-Anil Agarwal, Chairman, Vedanta


What the government has done is a very major step. Suddenly the focus is on the importance of manufacturing, making it a very attractive avenue for investment. Ultimately what you want is a lot more investments and what they have said about taxation on new companies coming in is a very innovative and extremely important step.

-R C Bhargava, Chairman, Maruti Suzuki


The current reduction in Corporate Tax by Finance Minister is an excellent step that was needed for Indian economy revival and manufacturing sector. It shows the government is well seized of the economic challenges facing all of us. I only wish more such steps, which government is already contemplating, could be taken together in one go like tapping NRI investments, with this one so as to create deeper impact, instill more confidence in the economy and amongst Corporates. This would certainly help put businesses back on track, generate more employment and most importantly, keep India as the principal investment destination amidst global slowdown.

-Gopichand P. Hinduja, Co-Chairman


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