Corporate leaders hail cut in tax rate; say will boost economy, manufacturing

Industry leaders on Friday hailed the government move to slash corporate tax rate for companies. Following are the comments of top industry leaders:

* Anil Agarwal, Executive Chairman, Vedanta Resources: The reduction of corporate taxes, including surcharges and cess, will significantly boost the economy and will provide a huge impetus for the manufacturing and infrastructure sector. We are confident this step, in coming days, will boost economic growth so that GDP can attain its true potential of 8-9 per cent. The journey looks extremely bright for creation of thousands of jobs in India and helping the country to march towards the USD 5 trillion-mark.

* State Bank of India Chairman Rajnish Kumar: The large reduction in corporate taxes across the spectrum of all companies is perhaps the boldest reform in the last 28 years! Such a rate cut will boost corporate bottomline, facilitate a reduction in product prices. Additionally, the move to incentivise setting up new manufacturing units in India comes at the most opportune time for foreign companies who could be actively looking for opportunities to invest globally! This move could also materially lead to India effectively integrating with the global supply chain and a boost to Make in India campaign!

* Uday Kotak, CEO, Kotak Mahindra Bank: Reducing corporate tax rate to 25 per cent is big bang reform. 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.

* Kiran Mazumdar Shaw, Chairman, Biocon: Corporate tax rate cut from 30 per cent To 25.2 per cent to spur growth. This is a great move which will firmly revive growth and investment. My hats off to Finance Minister for this bold but most needed move.

* Gopichand P Hinduja, Co-Chairman, Hinduja Group: The tax reduction is an excellent step that was needed for Indian economy revival and manufacturing sector. It shows government is well seized of the economic challenges facing all of us. 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 and amongst corporates.

This would certainly help put businesses back on track, generate more employment and most importantly, keep India as the principal investment destination amidst global slowdown.

* Dr Prathap C Reddy, Chairman, Apollo Hospitals: 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.

* Ajay Singh, Chairman and Managing Director, SpiceJet: This is a huge step. It 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. The Finance Minister has hit the ball out of the Arun Jaitley stadium!

* Sugata Sircar, CFO, Schneider Electric-India: The series of confidence building measures announced by the government recently and underscored by the Finance Minister on Friday is expected to create a positive sentiment in the market in terms of demand generation as well as investment. The lower rate announced for domestic manufacturing companies formed after October 2019 is expected to boost investments in the manufacturing sector.

* Ashishkumar Chauhan, MD & CEO, BSE: The slew of historic measures has brought down Indian corporate tax rates to amongst 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.

There are several other fiscal measures that have also been announced which all point to the government’s commitment to promote the business activities and enhance job creation manifold. These announcements will further boost the investor confidence and start the investment cycle.

* Sunil Bharti Mittal, Founder & Chairman, Bharti Enterprises: The slew of measures announced by the Finance Minister have come as a much needed gust of fresh air to resurrect and pump prime the economy. The bold and positive move to rationalize the corporate tax structure will help kick-start the next big economic upcycle. The measures clearly underline the resolute intent of the Government under the leadership of the Prime Minister to maintain India's position as the hottest investment destination in the middle of adverse global developments and a slowing world economy.

* Aditya Ghosh, CEO, OYO India: This is a bold step to provide a fillip to the Indian economy. Just ahead of the festive season, the Finance Minister by reducing the corporate tax rates, has given a triple booster dose to the economy as this will increase the retained earnings of the companies which will result in investible surplus for the future, shift India at par with its regional peers thereby removing one of the issues related to manufacturing and exports and maintain macroeconomic prudence by continuing to stimulate the investment cycle.

* Anand Kripalu, Managing Director and CEO at Diageo India: We welcome the bold changes introduced by the Government, which will strengthen India Inc’s role as the nation’s job and wealth creators. The increased tax savings will boost cash flows, spur domestic and foreign investment, provide competitive tax rates and act as an economic driver towards ‘Make in India’.