SME Times is powered by   
Search News
Just in:   • India’s engineering goods exports touch all-time high of $116.7 billion in 2024-25  • Trade minister vows all-out efforts to boost foreign investment, reshoring firms  • Solid monetary frameworks helped emerging markets navigate recent crises: Gita Gopinath  • India, as fastest growing economy, is ideal investment destination: RBI Governor  • India’s forex reserves on way to reclaim all-time high of $704.8 billion 
Last updated: 23 Sep, 2019  

Up.9.Thmb.jpg Big-bang stimulus

Stimulus.9.jpg
   Top Stories
» India’s engineering goods exports touch all-time high of $116.7 billion in 2024-25
» India, as fastest growing economy, is ideal investment destination: RBI Governor
» India’s forex reserves on way to reclaim all-time high of $704.8 billion
» Centre notifies new rules for GST Appellate Tribunal
» India’s steel industry poised for global growth, focus on FTAs and self-reliance: Piyush Goyal
Bikky Khosla | 24 Sep, 2019

In the fourth tranche of post-Budget economic stimulus measures, the Centre last week came out with Rs 1,45,000 crore stimulus which includes slashing of corporate tax to 22 percent for domestic companies, lowering of tax of 15 percent for new manufacturing firms and measures to boost the capital market. No doubt, this booster dose is going to give a major push to the sagging economy, which registered a 6-year low growth of 5 percent in the April-June quarter of FY20.

As far as corporate tax is concerned, this is the biggest reduction in 28 years. At one stroke, the rate has been slashed to 22 percent for domestic companies not availing incentives/exemptions from earlier 30 percent. With various surcharges kicking in, the actual rate for such companies now stands at 25.17 percent, but still it is at par with other Asian countries such as China and South Korea. The new tax rate, to be effective from 2019-20, will certainly induce private investment and boost consumption in the coming days.

In another major move, it was announced that the new domestic companies incorporated on or after October 1, 2019, making fresh investment in manufacturing, will only have to pay income tax at the rate of 15 percent from earlier 25 percent. Also, the enhanced super-rich tax on capital gains on sale of share has been removed, and no tax will be imposed on buyback of shares if companies have made announcement regarding it before July 5, 2019. These measure are welcome.

Overall, with this single biggest tax cut since India opened up its economy in 1991, the government will lose a whopping amount of Rs 1.5 lakh crore in revenue annually, but the question is whether it will now suffice to reverse the ongoing economic slowdown. Experts view that a lot is yet to be done, with regards to bank NPAs, NBFCs and debt market. Also, the stimulus further increases the government's fiscal risks.

I invite your opinions.

 
Print the Page
Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
84.35
82.60
UK Pound
106.35
102.90
Euro
92.50
89.35
Japanese Yen 55.05 53.40
As on 12 Oct, 2024
  Daily Poll
Do you think Indian businesses will be negatively affected by Trump's America First Policy?
 Yes
 No
 Can't Say
  Commented Stories
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter