India cuts corporate taxes to boost falling economy

India cuts corporate taxes to boost falling economy

New Delhi (Web Desk): The Indian government on Friday announced a slew of concessions aimed at boosting the economy.

Finance Minister Nirmala Sitharaman said that most corporate taxes were reduced for local companies from about 25 percent to 30pc. The lower tax rates will retroactively apply from April 1, the beginning of India's fiscal year, he added.

Share prices surged, with the Sensex in Mumbai jumping more than 5pc to its highest level since July.

India's economy, the world's 6th largest, was booming until recently but it has slowed in recent months, with growth in manufacturing dropping to 0.6pc in the last quarter from 12pc a year earlier.

Overall, the economy grew at an annual rate of 5pc in the April-June quarter, its slowest annual pace in six years. Many economists believe Prime Minister Narendra Modi's signature economic policies are at least partly to blame.

A surprise demonetisation in 2016 and a new goods and services tax have taken a dire toll on many businesses.

Instead of improving government finances as intended, the GST and demonetisation undermined India's financial stability, economists say.