New Delhi: Finance Minister Nirmala Sitharaman on Friday announced a 10% reduction in corporate tax, giving huge relief to the industry amid the ongoing sluggishness in the country. Many organizations including industry welcomed the government's move. A well-known economic institution called Crisil Research welcomed the government's decision and said that this decision will save a lot of companies. He said that this would save about Rs 37,000 crore to about 1,000 listed companies.
Crisil said that after this cut in corporate tax, India has now come on par with most Asian economies. "Several measures have been announced by the government in the last few days to overcome the sluggishness of the Indian economy," Crisil said in a statement. The announcement made by the Finance Minister on Friday will have the most widespread impact. According to our analysis, a reduction in corporate tax will save Rs 37,000 crore to 1,000 companies. This is about 25 percent of the government's total savings estimate.
Crisil said that its analysis is based on 1,000 companies of more than 80 sectors. These companies account for about 70 percent of the market capitalization of the National Stock Exchange. These companies include the financial services sector as well as oil and gas companies. With this decision, the government hopes to revive the market which will increase employment opportunities.
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