The government today announced the corporate tax would be slashed from 30 to 22 per cent for domestic companies and 15 per cent for new manufacturing companies, in a big measure to boost growth and investment. Among the first to welcome the steps was Kiran Mazumdar Shaw, whose tweets yesterday had drawn an instant retort from Finance Minister Nirmala Sitharaman.
"Corporate Tax Rate Cut From 30% To 25.2% To Spur Growth- this is a great move which will firmly revive growth and investment. My hats off to FM Nirmala Sitharaman for this bold but most needed move," Kiran Mazumdar Shaw, the chairman of Biocon, tweeted shortly after the Finance Minister's press conference. Ms Shaw's effective percentage of the reduced tax includes cess and surcharges, without which the base figure comes to 22 per cent.
Speaking to NDTV, Ms Shaw said: "It is a very, very important growth driver with a multiplier effect and you can see from the way the capital markets have rebounded, it brings back long-needed investor confidence to restart the economy."
This is being described as the biggest announcement so far by the government in Prime Minister Narendra Modi's second term to fight the slowdown after GDP growth slumped to a six-year low of five per cent in the April-June quarter of the current fiscal. Mr Sitharaman said that the total revenue foregone for the reduction in corporate tax rate and other relief measures was estimated at Rs 1,45,000 crore.
On Thursday, the twitter exchange between Ms Sitharaman and Ms Shaw started with a tweet by the Biocon chief, a leading voice of the industry.
"E-cigarettes banned, says Finance Minister Nirmala Sitharaman - should this not come from the Minister of Health? How about banning gutka too? How about MoF announcing some fiscal measures to revive economy?" - this tweet by Ms Shaw drew a swift reply from the Finance Minister, who said she had been regularly speaking about measures" on the economy.
Kiran ji, a few things. This press conference was dedicated to Cabinet decisions. I began by saying that I was there in my capacity as Chair of the GoM which has dealt with the matter. @drharshvardhan is out of country for an international meet. 1/3 https://t.co/oL1UXPqEvJ— Nirmala Sitharaman (@nsitharaman) September 19, 2019
"Kiran ji, a few things. This press conference was dedicated to cabinet decisions. I began by saying that I was there in my capacity as Chair of the GoM which has dealt with the matter. Dr Harsh Vardhan is out of country for an international meet."
"Cabinet Ministers join Prakash Javadekar, the Information and Broadcasting Minister, when required. Health Secretary was also with me, explaining details. These are protocols, as you know, which government press conferences follow."
"As Finance Minister - you might've observed - I've been working on and regularly speaking about measures we've been taking on matters of the economy."
Replying to the Finance Minister, Kiran Mazumdar Shaw said: "I now understand and I stand corrected. Thanks for explaining my confusion. Really grateful for your response."
Along with the markets, India Inc has given a big thumbs up to the decisions. "Looks like Diwali has come early," said Pawan K Goenka. It is a "bold, progressive step forward," said Uday Kotak, MD of Kotak Mahindra Bank.
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