Modi Govt extends Rs 1.45 lakh crore concession to corporate India, political rivals take a dig

By:
On:
In: Business and economy, Nation, Top Stories
Tagged: ,
Finance Minister Nirmala Sitharaman has slashed corporate tax from 30 to 22 per cent which would cost the public exchequer Rs 1.45 lakh crore.
Narendra Modi

TLI Staff

In the biggest ever sops to India Inc, Finance Minister Nirmala Sitharaman has announced a flurry of tax concessions including reduction in corporate tax to 22 per cent from 30 per cent which would cost the government Rs 1.45 lakh crore in revenue loss.

The effective tax rate for domestic companies would now be 25.17 per cent (inclusive of surcharge and cess) provided they do not claim any other fiscal concession or incentives.

The lower corporate tax and other concessions have been made effective through an ordinance to amend the Income Tax Act, 1961.

Tax experts have said that the move to slash corporate income tax would be beneficial more to corporate biggies like Adani, Ambani, Tata and Birla among others. Companies which have annual turnover of upto Rs 400 crore and account for 99.3 per cent of India Inc already pays lower tax of 25 per cent.

In order to lift market sentiment, the Modi government has also announced that the enhanced surcharge announced in the budget will not apply on capital gains arising on sale of any security, including derivatives by foreign portfolio investors (FPIs).

“For listed companies which made announcement for public buyback before July 2019 it is provided that tax on buyback of shares of such companies will not be charged,” Finance Minister Sitharaman said in Goa.

With massive concessions extended to companies, market operators and foreign investors in the capital market, political opponents took a dig at Prime Minister Narendra Modi who is scheduled to be in the US and meet American corporate honchos there.

“Announcement timed for proposed spectacle of “Howdy Modi” in the US? Massive concessions to foreign speculators. India is going through its worst phase after independence and all we are getting is a callous govt and circuses,” senior CPI leader Sita Ram Yechury said in a twitter post.

As in the past, Prime Minister Modi would address a rally of American-Indians in the US. This time it is happening in Houston and a lot of buzz has been created around the event titled “Howdy Modi”.

Gandhi scion and main political rival Rahul Gandhi tweeted, “Amazing what PM is ready to do for a stock market bump during his #HowdyIndianEconomy jamboree. At + 1.4 Lakh Crore Rs. the Houston event is the world’s most expensive event, ever! But, no event can hide the reality of the economic mess “HowdyModi” has driven India into.”

Also read: Sops for corporates to add production when it is already in excess

Also read: Modi government bans E-cigarettes. Now, vaping could land you in jail

Also read: FM Sitharaman lines up sops worth over Rs 60,000 crore for housing, exports in a bid to boost economy

Also read: Modi government fails to deliver on economy, yet again