The government realised the need to cut corporate tax to boost investments, said Chief Economic Adviser KV Subramanian on Friday.
Subramanian’s statement comes weeks after the government decided to cut the corporate tax. The cycle of growth for the last few quarters has not been as it was earlier, he said and added that “corporate tax rate is important for investments”.
India’s economy grew at 5 per cent in the first quarter of 2019-20 – the slowest pace in over six years. The second-quarter GDP number is scheduled to be announced later today.
The government has undertaken a slew of measures to control the slowdown in growth. In September, it announced a cut in the corporate tax rate to 22 per cent from 30 per cent. It also lowered the tax rate for new manufacturing companies to 15 per cent to attract new foreign direct investments.
(With input from agencies)