Given the continuing decline in the investment rate in India, there are hopes that the Budget would reignite the animal spirits required to revive the investment momentum. The corporate sector is looking for a reduction in the corporate tax rate, as promised by the Finance Minister a few years ago but implemented only for smaller firms in last year’s Budget. Given the worldwide trend of reduction in corporate tax rates, India may now have to move in that direction too. With the applicability of minimum alternate tax (MAT) and dividend distribution tax, the overall tax burden on the Indian corporate sector is one of the highest in the world and a reduction would go a long way in creating a more investment-friendly environment.
SOURCE: The Hindu