This refers to “Rs 1.45 trn Diwali gift for India Inc” (September 20). By slashing the corporate tax rate to 22 per cent from 30 per cent, Union Finance Minister Nirmala Sitharaman has sent a clear message to India Inc that time has come to end the piecemeal approach to economic reforms. With the lowered corporate tax rates, the country’s attractiveness as an investment destination has enhanced. No doubt, it would also incentivise firms relocating from countries like China to set up manufacturing units in India.
With corporate India now given the option to choose a lower tax rate without taking advantage of exemptions and incentives, the government has ushered in a conductive atmosphere to move towards a simplified tax architecture and reduction of tax litigation. While the latest measures suggest the government's belief in pushing growth through investment than boosting consumption, concerns over whether the government would be able to meet its budgeted fiscal deficit target of 3.3 per cent remains. To plug the anticipated revenue shortfall arising out of the latest measures, the government may opt for an aggressive disinvestment programme sooner than later.
M Jeyaram, Tamil Nadu
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