Corporate tax cut to spur growth & investments, says India Inc
The tax cut announcement by the Finance Minister will also boost marketing and advertising & aid the media sector, say industry heads
The corporate tax cut, the latest announcement by the Finance Minister as part of measures to boost the economy, has brought cheer in the industry with most industry heads saying the move will increase cash flow, thereby giving a push to marketing and advertising.
Nirmala Sitharaman on Friday announced that corporate tax has been cut to 25.17 per cent.
Homegrown media companies have said the move will surely bring a positive growth trajectory in their ad bills. Karan Bedi, CEO, MX Player, says, “This is a fantastic move on part of the government and it will spur growth, investment and the economy. For the media sector too, it will have a very positive impact as advertising is surely to benefit from the tax cut.”
Homegrown brands are also celebrating the move as they forsee the slashed corporate tax rates to boost the economy.
According to T S Kalyanaraman, Chairman and Managing Director, Kalyan Jewellers, “It is very positive to see the government move pragmatically and provide the much needed liquidity boost to the economy. Lower tax rate will increase transparency in the gems and jewellery industry, which will ultimately lead to a shift from unorganised to organised sector. We welcome this dynamic decision.”
The reduced rates will further the cause of ease of doing business in India, say others. Manish Sharma, President and CEO, Panasonic India and South Asia said, “The announcement to cut corporate tax rates for existing domestic companies to 22 per cent and new manufacturing companies to 15 per cent is a progressive step and one that will spur growth. The decision will not only further India’s ease of doing business but also provide impetus to the manufacturing sector in the country. We believe the move will enable Indian organisations to compete at par with the developed nations on a global scale.”
Meanwhile, Anand Kripalu, Managing Director and CEO at Diageo India, said the move will boost India Inc’s role in creating jobs and wealth. “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’.”
According to Bhavin Turakhia, Founder and CEO, Flock, a team messaging collaboration platform, the announcement will greatly benefit Indian corporates with the start-up sector slated to see an inflow of investments and an uptick in growth. These measures will go a long way in not only augmenting local businesses but also spur the overall growth of the economy.”
Javed Tapia, Managing Director, Clover Infotech, says: “The latest announcement by the government of India on the slashing of effective corporate tax to 25.17 per cent, inclusive of all cess and surcharge for domestic companies, is a welcome step for the Indian economy as it will promote inestments and infuse growth. This will provide a much needed fillip across sectors and will create new employment opportunities. Further, it will accentuate prospects for domestic businesses and accelerate ‘Make in India’ in its true sense.”
The tax cut will promote local manufacturing and increase employment opportunities, says Kishan Jain, Director, Goldmedal Electricals, a homegrown FMEG company. “These measures will aid domestic production of energy efficient solutions such as LED lighting and immensely benefit companies operating in this space. We are positive that the economic situation will improve in the coming months, which will also boost demand in the consumer electrical segment.”
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