Slashed corporate tax will help revive investment in India, says IMF

New Delhi, Oct 19 (KNN) Lauding India's decision to reduce the Corporate Tax, the International Monetary Fund (IMF) has said that the decision will have positive impact on investment.

IMF also said that India should address continued fiscal consolidation and secure long-term stability of the fiscal conditions. 

“We support their corporate income tax cut because it has a positive impact on investment but India needs to be careful because of limited fiscal space. ” Changyong Rhee, Director, Asia and Pacific Department, IMF, told reporters at a news conference in Washington.

“The monetary policy stimulus and the announced corporate income tax cut are expected to help revive investment,” said the top IMF official.

Following a marked slowdown in the last two quarters in India, the economy is expected to grow at 6.1 per cent this fiscal year, picking up to 7.0 per cent in 2020, he said.

In September, the government had slashed the effective corporate tax from 30 per cent to 25.17 per cent, inclusive of all cess and surcharges for domestic companies in order to promote growth and investment.

Finance Minister Nirmala Sitharaman had informed that the total revenue forgone on account of this measures would be Rs 1.45 trillion per year.

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