The government decision to cut corporate tax will boost growth and investment in the country, Minister of State for Finance Anurag Singh Thakur said on Thursday.
He also said there is a need to fight against counterfeit, smuggling and piracy as it has hurts economy, and also hampers job creation.
Prevention of smuggling can increase employment by up to 16.36 lakh jobs in five key industries - textiles, tobacco products, garments, capital goods and consumer Electronics, according to a study released by the minister.
Indian economy loses Rs 1,17,253 crore due to smuggling in these five sectors, it said.
On corporate tax reduction, Thakur said new investment will help create lot of job opportunities in the country.
"India now provides most competitive rate in the world and will attract fresh investment in manufacturing which will catapult our country in the USD 5 trillion economy," he said.
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In the biggest reduction in 28 years, the government on Friday slashed corporate tax by almost 10 percentage points as it looked to pull the economy out of a six-year low growth and a 45-year high unemployment rate by reviving private investments with a Rs 1.45-lakh crore tax break.
Base corporate tax for existing companies has been reduced to 22 per cent from the current 30 per cent; and for new manufacturing firms, incorporated after October 1, 2019 and starting operations before March 31, 2023, to 15 per cent from the current 25 per cent.
India had the highest effective corporate tax rate of 38.05 per cent in 1997.
Companies in China, South Korea and Indonesia pay 25 per cent tax, while those in Malaysia pay 24 per cent. Only Japan has a higher tax than India at 30.6 per cent. Hong Kong has the lowest corporate tax rate of 16.5 per cent, whereas Singapore has 17 per cent rate and Thailand and Vietnam levy 20 per cent tax on companies.
Speaking at the event, Minister of State for Home Nityanand Rai said counterfeiting and smuggling directly impacts health, economy, education and society.
"We should come together and say no to counterfeit and smuggled products. The government of India has already taken several measures to address this issue, Ficci CASCADE should send recommendations on curbing this problem to all ministries in the government to further strengthen these measures," Rai said.
Ficci CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) chairman Anil Rajput said smuggling and counterfeiting are increasingly hurting Indian economy and have crept into multiple sections of the society.
Immediate steps are required, both in the form of policy intervention and awareness generation, to address this growing menace, Rajput said.
There is tremendous potential for India to create 5 lakh jobs, however, this will require ruthless handling of smugglers and counterfeiters, he said, adding the cascading impact of this could be a potential 16 lakh job opportunities, owing to backward linkages and multiplier effects.