New Delhi: Prime Minister Narendra Modi on Friday termed the decision to slash corporate tax as "historic" while the opposition parties used the announcement to attack the government, with the Congress linking it with his US visit, saying it was "amazed" at what he will do for a stock market bump ahead of his Houston speech.
BJP president Amit Shah, senior party leaders as also allies in the government cheered Finance Minister Nirmala Sitharaman's announcements to boost the economy, while opposition parties were critical and slammed the government for "deepening economic crisis", its "bankruptcy of ideas" and lack of benefits for the common man.
In the biggest reduction in 28 years, the government slashed corporate tax by almost 10 percentage points as it looked to pull the economy out of a six-year low growth and a 45-year high unemployment rate by reviving private investments with a Rs 1.45-lakh crore tax break.
Two-and-a-half-months after presenting her maiden Budget that was hailed as "development-friendly" and "future-oriented", Sitharaman announced cutting corporate tax rate to 25.17 per cent to bring them at par with other Asian countries such as China and South Korea but at the expense of potentially breaching the 3.3 per cent fiscal deficit target.
As the market zoomed after Sitharaman unveiled another clutch of measures to boost the sagging economy, Modi said announcements in the last few weeks clearly demonstrate that his government is leaving no stone unturned to make India a better place to do business and improve opportunities for all sections of society.
It will increase prosperity and make India a USD 5 trillion economy, he said on Twitter.
"The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians," he said.
Congress leader Rahul Gandhi also took to social media to take a swipe at the Prime Minister.
"Amazing what the PM is ready to do for a stock market bump during his #HowdyIndianEconomy jamboree," he said in a swipe while referring to Modi's 'HowdyMody' event in Houston on Sunday.
Modi left for a week-long visit to the US on Friday.
"At +1.4 Lakh Crore Rs the Houston event is the world's most expensive event, ever! But, no event can hide the reality of the economic mess 'HowdyModi' has driven India into," Gandhi claimed on Twitter, referring to the amount of relief the announcement will give to the corporate sector.
Top BJP leaders were, however, quick to hail the measures.
Shah, also the Union home minister, said the announcement showed that the Modi government is committed to make India a big manufacturing hub and this decision along with previous announcements on relaxing FDI will go a long way in realising this objective.
Lauding Modi and Sitharaman, the party's working president J P Nadda said the announcement made by her will give "revolutionary boost in promoting investment".
Shah also said this "bold" move will make Indian firms globally competitive and the country's markets much more exciting for potential investors.
However, leaders of the Left parties accused the government of neglecting the plight of farmers while offering concessions to corporates amid the "deepening economic crisis".
CPI(M) general secretary Sitaram Yechury said only Left parties can challenge the "rightist disorientation" and a "definite fascist trend" in the country.
"Modi government in the past months has provided a relief of over Rs 2.25 lakh crore to the rich in the country but has shied away from helping the farmers who are forced to commit suicide due to farming sector distress," Yechury said at a convention of several Left parties.
At a briefing, Congress chief spokesperson Randeep Surjewala claimed that the reduction in corporate tax rate is the government's "panic reaction" to tide over the sinking stock market and claimed that the Modi dispensation 2.0 has turned out to be an "economic and political disaster" for India.
Sitharaman and her colleagues are marred by "bankruptcy of ideas" to revive the ailing economy, he said, adding that the worst sufferers of the "economic recession" are the salaried people, the middle class, the youth, small shopkeepers and small and medium businesses.