New Delhi, Sep 20, 2019: Congress MP Rahul Gandhi today weighed in on the government’s move to cut corporate tax on domestic companies with a dig at Prime Minister Narendra Modi’s scheduled ’Howdy, Modi!’ event in Texas on Sunday, NDTV reported.
Referring to the event in Houston on September 22 that’s billed by the organisers as the largest-ever turnout for a foreign elected leader on US soil, the Congress leader today in a tweet called the massive rise in the markets a "jamboree", and added the hashtag "#HowdyIndianEconomy".
"Amazing what PM is ready to do for a stock market bump during his #HowdyIndianEconomy jamboree. At + 1.4 Lakh Crore Rs. the Houston event is the world’s most expensive event, ever! But, no event can hide the reality of the economic mess ’HowdyModi’ has driven India into," Mr Gandhi said.
The White House has confirmed US President Donald Trump will meet with PM Modi at the sold-out event where some 50,000 people, mostly Indian-Americans, will turn up.
Adding to Mr Gandhi’s tweet, his party drew PM Modi’s attention to the corporate tax rate of 30 per cent that was announced by the National Democratic Alliance government in the Union Budget this year. "Your 2019 budget increased #CorporateTax to 30% despite many objections. Today after yet another U-Turn by the FM, you pat yourself on the back & call the move historic-The only thing historic is a govt that refuses to accept responsibility for destroying a thriving economy," the Congress party tweeted.
PM Modi today said the corporate tax move was historic and a "win-win" for 130 crore Indians. "The step to cut corporate tax is historic. It is a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians," PM Modi tweeted.
Finance Minister Nirmala Sitharaman’s announcement of corporate tax cut on domestic companies had an immediate effect on the markets, with the S&P BSE Sensex surging over 2,100 points and the NSE Nifty climbing above the 11,250 mark, after days of volatile trading.
The effective tax rate has been reduced from 35 per cent to 25.2 per cent, which includes all surcharges and is applicable on companies that aren’t availing any incentives, she said at a press briefing in Goa today. If calculated without the charges, the tax rate cut works out to 22 per cent from 30 per cent.
Domestic firms incorporated on or after October 1, 2019 that want to make fresh investment in manufacturing will have an option to pay income tax at 15 per cent, she said. The new tax structure is effective from April 1, 2019.
The government will, however, bear a massive Rs. 1.45 lakh crore per year to support its move to reduce corporate tax. While domestic companies have a lot to cheer about, the Finance Minister said she is "conscious" of the effect the announcement would have on India’s fiscal deficit target. "We are conscious of the impact all this will have on our fiscal deficit," said Ms Sitharaman, who has targeted to narrow the budget gap to 3.3 per cent of the GDP this year. A fiscal deficit is a shortfall in the government’s income compared with its spending.