Kolkata, Sep 20: The industry leaders and market experts welcomed Finance Minister Nirmala Sitharaman's decision to slash corporate tax for domestic companies and newly formed manufacturing domestic companies to 22 per cent and 15 per cent respectively, aimed to put the growth engine back on track.
Reacting to the announcements, Harsh Agarwal, Director, Emami Ltd, said : "We welcome the bold step taken by the Finance Minister to boost the country’s economic growth and revival.
"The reduction in corporate tax rate as well as MAT rate was much needed and is a boon to both established and new companies. This proactive step by the Government will help to arrest slowdown and lift the overall market sentiments."
Aditya V Agarwal, Director, Emami Group said,"It’s a ‘Dream Mini Budget’ announced by the FM today. The tax reliefs announced is in-arguably the best & quickest way to boost private consumption, especially during the ensuing festive seasons and will help in tackling the current economic slowdown.
"This will also facilitate inflow of funds in the infra and housing segment which will create high demand for the cement industry as well as boost consumption of daily need products such as edible oil. - Aditya V Agarwal, Director, Emami Group."
Mr. Ramesh Agarwal, Whole Time Director- Rupa & Company Ltd. said," We welcome the bold steps taken by the Hon’ble Finance Minister Ms. Nirmala Sitharaman to revive economy and position India as one of the most attractive business destination. Finance Minister today has laid out a red carpet of measures that we believe would act as a force multiplier to boost the economy.
"These measures taken by the government will ensure hundreds of billions of dollars of FDI & FII flows over the medium term as well as investment at accelerated rates by the Corporates. We see it as an encouraging step as it gives more spending power to the corporates which will contribute to expansion of business thus creating an ecosystem where more jobs are created and better products are offered."
Vishal Gondal, Founder & CEO, GOQii said: “We welcome the radical announcement of the government. Increased cash flow savings should spur investment and job creation. It’s a strong reiteration of the intent to usher progressive reform and serve as a catalyst towards a fit financial health."
Dr. Prathap C. Reddy, Chairman, Apollo Hospitals on Corporate Taxation announcement said: “We heartily welcome the measures announced by The Hon’ble Finance Minister today. Corporate India has for long been advocating standardised rates of corporate taxation, as a tool to drive creation of investible surplus and enhanced dividend payouts to drive purchasing power.
At this time of global economic slowdown, we see this announcement as a decisive move by the Government of India to enhance competitiveness of Indian industry in the domestic and international arena.
We also welcome the initiative to give even lower levels of tax rates to new manufacturing firms. India has the potential to become the manufacturing hub for the world, and drive job creation. In healthcare, this will give a boost for the manufacture of domestic consumables and devices.
We are very grateful to the Government of India for their dynamic and flexible approach, and for being responsive to the needs of Indian industry. We assure them that we will rise to the challenge of economic growth and job creation, and do everything in our power to make the Government’s vision of GDP of 5 Trillion USD by 2025 a reality.”
Sitaram Sharma, president, Bharat Chamber of Commerce observed the decision is a huge stimulus to the Indian economy which is going through real tough times.
This is a timely action made by the Government and was much needed given the present condition of the economy. This reduction in corporate tax rate is expected to boost investments and reduce prices for consumers which in turn will push aggregate demand.
"Both Sensex and Nifty gained their highest in a single day in 10 years post this announcement. This clearly reveals that corporate tax cuts had been the Industry’s long standing demand,”added Mr Sharma.
“Though a welcome move for the manufacturing sector, the reduction is only meant for large corporate sector and not for MSMEs, in particular, which form the backbone of India’s economic growth and development, ”Mr Sharma commented.
“It is expected that the MSME sector would also be supported with similar stimulus, '' he observed.
“The withdrawal of higher surcharge on capital gains on sale of security including derivatives held by FPIs is a welcome move. Though Minimum Alternate Tax (MAT) has been reduced to 15 per cent from 18.5% for companies continuing to avail exemptions and incentives, it would have been prudent to abolish MAT altogether,” he emphasised.
“New Manufacturing companies incorporating on or after October 1, 2019 will be the biggest gainers as their tax rates have been brought down to 15 per cent from the earlier 25 per cent. The new tax rates are competitive and at par with India’s peers in South-East Asia. As a result, more revenue inflows are expected from foreign investors," he stated. (UNI)