Congress links it to Howdy Modi
Describing the step to cut corporate tax as “historic”, Prime Minister Narendra Modi on Thursday said it would result in a “win-win for 130 crore Indians”. But the Opposition felt otherwise. The Congress termed the move a “stock market bump” with the PM’s “Howdy Modi” event in the US in mind and the CPI(M) said it was intended “to enrich the corporate and heap miseries on the common man”. At the same time though, a section within the Congress welcomed the move.
Shortly after Finance Minister Nirmala Sitharaman announced the decision, Modi tweeted: “The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and would result in a win-win for 130 crore Indians.
“The announcements in the last few weeks clearly demonstrate that our Government is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society and increase prosperity to make India a $5 trillion economy.”
Union Home Minister Amit Shah said the Modi Government was committed in making India a big manufacturing hub and the slashing of corporate tax rates would make the country’s markets “much more exciting” for potential investors.
But the Congress the decision "panic reaction to tide over choppy sensex index, and said the “constant rollbacks” may give an “impression of progress through stock market bumps” which will lead to worsening of the economic situation and is unlikely to revive investments.
Former Congress president Rahul Gandhi said he is amazed at what the PM is ready to do for a stock market bump ahead of his ‘Howdy Modi’ event in Houston, which he termed as the world’s most expensive event ever. He said the Government was pumping LIC’s money in loss-making companies. “But, no event can hide the reality of the economic mess ‘Howdy Modi’ has driven India into,” he tweeted.
Former Union Minister Jairam Ramesh and senior Congress leader Abhishek Manu Singhvi welcomed the decision but expressed doubts on whether the step will revive investment.
Ramesh said the Government’s move does nothing to dispel the fear that pervades India Inc. “A headline-itis afflicted, panic-stricken Modi Sarkar has cut corporate tax rates less than 3 months after a Budget and 4 months before the next one. This is welcome but it is doubtful whether investment will revive. This does nothing to dispel fear that pervades in India Inc,” Ramesh said on Twitter.
Singhvi said drastic reduction in corporate tax rate is good but the arbitrage between highest effective individual tax rate of 42 per cent and higher effective corporate rate of 25 per cent begins to look absurd.
For his part, CPI(M) general secretary Sitaram Yechury termed the Centre’s move as crony capitalism at its worst. “Announcement timed for proposed spectacle of “Howdy Modi” in the US? Massive concessions to foreign speculators. India is going through its worst phase after independence and all we are getting is a callous Govt and circuses. When we needed more money in the hands of the people to stimulate demand, the Govt has handed it to corporates instead. This is crony capitalism at its worst,” said Yechury.