It is a real surgical strike on slowdown. What a stimulus? On one side, Rs1.45 lakh stimulus provided and on other side, potential business opportunities are created. It is a double edged sword. Simply providing package by handing over thousands and thousands of Crores does not termed as good economics. The reward for spending is tremendous. It will give back returns not Rs 1.45 lakhs but many times of that.
The Corporate tax @30% is one of the peak rates in the world and regressive to the industry . The peer group of countries in ASEAN, Japan and China are charging far lower when compared to India. It became disincentive instead of incentive because of this regressive tax regime. Though Government wanted to bring these rates down on par with other peer countries, its space in revenue collection and fiscal position made the Government helpless all these years. They were able to reduce the rates to smaller companies and increasing threshold limit year by year and till yesterday, it was Rs 400 crores. Now, in a single master stroke, Nirmala Sitharaman created history. It is possible because of large scale transfer of reserves by Reserve Bank of India. The amount is well utilised as this stimulus is having double edged to bring more and more business.
It is unbelievable even now. It is always argued that business can grow only in competitive environment. Nobody expected that straight away 8% reduction is possible in Indian political system and Indian fiscal position. It is unbelievable. The manufacturing units to be started from 1st October will be charged only 15% tax. It is unbelievable. Though calculations are yet to come, it is far far bigger than GST reduction for Auto sector. It is good that no sector is left over. It is unbelievable. Surcharge levied on shares buy back is lifted for capital gains which will boost FII investments. It is unbelievable.
Modi is difficult to understand. His actions are unpredictable. He once again proved it right . This stimulus is far far superior when compared to earlier announcements. The long pending demand of parity of tax rates with peer countries is settled more than expected. It is now the Corporate sector to show the results. Government revived the animal spirits fully. There is no doubt that this booster will revive the faster growth once again. The naysayers are shocked and became dumb because of this Brahmastra by Modi. THAT IS MODI. Day by Day, Minute by Minute, people's confidence on Modi is increasing. THAT IS MODI. Modi mania increases leaps and bounds. THAT IS MODI.
Now, let us move to next event HOWDY MODY day after tomorrow @Houston.