Timing of corporate tax cut 'dictated by HowdyModi event', says Jairam Ramesh

Jairam Ramesh (Reuters)

Senior Congress leader Jairam Ramesh dismissed 'Modi's 'trump card'' of cutting India's corporate tax rate, saying that its timing was dictated by his upcoming event 'Howdy Modi' in Texas, United States.

"PM can now say, 'I have come to Texas promising lower Taxes'," Ramesh tweeted, soon after FM Nirmala Sitharaman announced that the government was cutting the corporate tax rate to 22%.

Notably, Texas is a southern US state that has traditionally voted for the Republican party, which is a big votary of low taxes.

Even as he welcomed the development, Ramesh cast doubts over the effectiveness of the decision to cut the corporate tax rate.

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.

— Jairam Ramesh (@Jairam_Ramesh) September 20, 2019

While the corporate tax rate was brought down to 22 percent, the FM also announced a new 17.01% tax rate for new manufacturing units.

FM Sitharaman also said that the move was facilitated by promulgating an ordinance to an amendment of the Income Tax Act.