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‘Historic’: Policy Makers, India Inc Hail FM’s Booster for Economy

Policy makers said, government’s decision has infused fresh energy into the industry and will boost economic growth.

Published
Business
3 min read
Finance Minister Nirmala Sitharaman
i

Congress leader Rahul Gandhi on Friday, 20 September, said he is “amazed” at what Prime Minister Narendra Modi is ready to do for a stock market bump ahead of the 'Howdy Modi' event in Houston, which he termed as the world's most expensive jamboree ever.

“No event can hide the reality of the economic mess 'Howdy Modi' has driven India into,” Gandhi said.

The Congress leader's attack comes after the government announced the slashing of corporate tax rates for domestic companies from 30 percent to 22 percent. The tax for domestic manufacturing companies incorporated after 1 October 2019, has been fixed at 15 percent, as the government looked to boost demand and investments.

Sitharaman announced fiscal measures that will cost the government Rs 1.45 lakh crore in revenue annually.

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‘Infuses Fresh Energy Into Corporate India’

Hailing the reduction in corporate tax and other fiscal relief measures as “bold”, policy makers on Friday said the government's decision has infused fresh energy into the industry and will boost economic growth, according to PTI.

Commerce and Industry Minister Piyush Goyal thanked Finance Minister Nirmala Sitharaman for the announcements.

Oil Minister Dharmendra Pradhan said the announcements have infused “fresh enthusiasm and energy” into the corporate sector.

Women and Child Development Minister Smriti Irani said the "landmark tax reforms" introduced by government will give major boost to 'Make in India', promote growth and increase investments.

Minister of State for Finance Anurag Thakur said the step to cut corporate tax is “historic.”

Niti Aayog Vice-Chairman Rajiv Kumar said the announcements are "a solid response to all the Cassendras".

Niti Aayog Chief Executive Officer Amitabh Kant said, the move will “provide a major impetus to animal spirits."

‘Will Boost Economy, Manufacturing’

Meanwhile, the industry leaders on Friday also hailed the government’s move to slash corporate tax rate for companies.

Executive Chairman of Vedanta Resources Anil Agarwal said the reduction of corporate taxes, including surcharges and cess, will significantly boost the economy and provide a huge impetus to the manufacturing and infrastructure sector, PTI reported.

“We are confident this step, in the coming days, will boost economic growth so that GDP can attain its true potential of 8-9 percent.”
Anil Agarwal, Executive Chairman of Vedanta Resources 

State Bank of India Chairman Rajnish Kumar said, the large reduction in corporate taxes across the spectrum of all companies is “perhaps the boldest reform in the last 28 years.” Kumar added that the rate cut will boost corporate bottom-line and facilitate a reduction in product prices.

CEO of Kotak Mahindra Bank Uday Kotak said reducing corporate tax rate to 25 percent is “big bang reform” and that it allows Indian companies to compete with lower tax jurisdictions like the US.

“It signals that our government is committed to economic growth and supports legitimate tax abiding companies. A bold, progressive step forward,” Kotak said.

Biocon Chairman Kiran Mazumdar Shaw said the move will “firmly revive growth and investment.”

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‘Decisive Move by Govt to Enhance Competitiveness’

Co-Chairman of Hinduja Group Gopichand P Hinduja lauded the tax reduction and said “it shows the government is well seized of the economic challenges facing all of us,” according to PTI.

“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 economy,” Hinduja said.

Chairman of Apollo Hospitals Dr Prathap C Reddy hailed the timing of the announcement, calling it a decisive move by the government to enhance competitiveness of Indian industry in the domestic and international arena.

Chairman and Managing Director of SpiceJet Ajay Singh called the move a huge step which will improve sentiment and go a long way in reviving growth, investment and demand.

“This move, the latest in a series of a steps taken by the government to spur growth, demonstrates the ability of the finance minister to come up with big solutions to big problems,” Singh added.

MD and CEO of BSE Ashishkumar Chauhan said the slew of “historic measures” has brought down Indian corporate tax rates to among the lowest in the world especially for the new manufacturing companies.

“These decisions will be celebrated as historic and will go a long way in improving 'Ease of Doing Business In India' even further,” Chauhan said.

Moody's Investors Service said the government's move will boost net income of Indian firms, and is a credit positive move.

(With inputs from PTI.)

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