Industry leaders and experts on Friday exuded confidence that the measures announced by the government on corporate tax front will help India attain its true potential of 8-9 per cent of GDP growth.
Niti Aayog Vice-Chairman Rajiv Kumar also affirmed that the new measures for the corporate sector would make achieving 8 per cent economic growth "easy".
Global metal and mining giant Vedanta Chairman Anil Agarwal opined that the much-needed series of measures announced by the government on corporate tax front will help the country attain its "true potential" of 8-9 per cent GDP growth.
Commenting on the step to reduce the corporate tax rate, Tata Steel CEO and MD T V Narendran said it addresses the cost of doing business in India and is a positive for the companies operating in India currently and for foreign investors thinking of India as an investment destination.
"However, I guess the challenge for the government is to find alternative revenue streams to support the infrastructure expenditure being planned," he said.
Industry chamber Assocham President B K Goenka said the mega Rs 1.45 lakh crore booster will revive global and domestic investment into the Indian economy, besides acting as a major catalyst for investors to consider India as a serious alternative for manufacturing base against the backdrop of US-China trade war.
Agarwal said the reduction in corporate tax and other fiscal measures will spur economic growth.
"The move will definitely prove to be 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," he said.
Daksha Baxi, Partner, International Taxation, Cyril Amarchand Mangaldas said permitting the existing companies that are currently paying 34 per cent tax to opt out of their tax holidays and pay 22 per cent (net 25 per cent) tax and not be subject to MAT will enable them to relook at their taxation structure to free up their cash flow which was adversely impacted due to MAT.
"This will enable companies to re-invest, even in the form of setting up new companies for manufacturing activities and benefit from lower tax rate of 17 per cent (net) for such new companies," Baxi said.
Dalmia Bharat Group MD Puneet Dalmia the Friday's decisions will improve ability of India Inc to make fresh investments, speed up projects, and make a positive impact on job creation.
"It's a very bold move and will improve the sentiment dramatically," Dalmia said.
Expressing hope that the deep tax cut will be a fillip for the flagging economy, Fortis Healthcare MD and CEO Ashutosh Raghuvanshi said the development is a significant move to boost economic growth.
JSW Chairman and Managing Director Sajjan Jindal said the major announcement would not only revive the sentiment but also enhance the competitiveness of the Indian industries.
JSPL Chairman Naveen Jindal said that the tax cut will bring in more investments in the manufacturing sector and create significant employment opportunities.
Jindal Stainless Limited MD Abhyuday Jindal said, "It is a thoughtful move by the Ministry of Finance to reduce corporate tax to a significant degree. I'm looking forward to the positive impact it will have on the manufacturing sector, and eventually the markets."
SAIL Chairman Anil Kumar Chaudhary said, "It is a welcome move which will bring in investment in new projects from freed up cash leading to employment opportunities, manufacturing growth and stimulus towards higher consumption. This move is surely expected to have positive effect on the Steel Industry which has strong forward and backward linkages."
Shyamal Mukherjee, Chairman, PwC India said the intent of the government towards a softer tax regime is welcome and a step in the right direction.
Gautam Mehra, Partner and Leader Tax and Regulatory, PwC India said the new tax measures are both path breaking and bold, and give India a competitive slot amongst the leading economies of the world in the corporate tax rate table.
Harshavardhan Neotia, Chairman of Ambuja Neotia group, was of the opinion that move signals the finance minister's commitment for expansion of the economy, while Ajay Durrani, MD of Covestro India said the Indian tax level is now at par with the global tax level and will open doors for Indian companies to compete internationally.
Chairman and Managing Director of ReNew Power Sumant Sinha said "reasonable" tax rates also go a long way in ensuring better compliance.
Welcoming the measures, the Automotive Component Manufacturers Association of India (ACMA) President Deepak Jain said the steps in the right direction to give manufacturing, investments and economic activity a boost.
The measures will also put India in the league of competitive economies in the world, he added.
In the views of Aditya Ghosh, CEO, OYO India and South Asia, the government's decision just ahead of the festive season has given a triple booster dose to the economy.
According to him, the decision 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.
Industry chamber PHDCCI said the government's decision will not only boost the business sentiments but also go a long way to strengthen India's journey towards a USD 5 trillion economy by 2024-25 and USD 10 trillion economy by 2030.
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