Finance Minister Nirmala Sitharaman has highlighted that corporate tax reduction is aimed at attracting fresh investment and generating jobs, and said that ‘green shoots’ are already visible with several foreign as well as domestic firms showing interest to invest. Amid concerns over slowing growth, she assured that the government was ‘pro-active’ in addressing the challenges faced by the economy and also made it clear that tax rate cut was not aimed to benefit certain companies but the entire industry.
Allaying fears of corporate tax reduction impacting revenue collection, she said gross direct tax collection increased by 5% till November this fiscal. She added that the decision to reduce corporate tax will have an impact of about Rs 1.45 lakh crore on revenue collection, but it will help in bringing more funds within a year’s time. She also stressed that maximum direct tax collection comes in the final quarter of the financial year.
On the impact of corporate tax cut, the minister said ‘Yes, we are conscious of it and we are conscious that if not today, in a matter of a year you will have a lot of investments coming into this country. I can see the initial green shoots.’ She also allayed fears on economic slowdown, saying it was not for the first time that the rate of growth of Gross Domestic Product (GDP) had slowed to 4.5%. She said in the fiscal 2012-13 also the GDP had recorded sub-5 per cent growth, but it increased later.