Argument’s Sake Podcast: Why Prime Minister Modi Did What He Did - Corporate Tax Rate Cut
‘Argument’s Sake’ is a podcast series that opens up the debate on popular topics to alternative theories and contrary opinions. It is hosted by BloombergQuint’s Menaka Doshi.
India’s GDP growth has slipped to 5 percent and what’s worse – consumption growth, that’s so far played a lead role, is down to an 18-quarter low of 3.1 percent. And yet the fiscal stimulus that Prime Minister Narendra Modi’s government picked was one that boosts, not consumption, but corporate profitability and investment. This at a time when capacity utilisation is still far from peak.
- Why boost corporate profitability over consumption?
- Why not cut personal income tax rates or GST rates?
- Why now? Was it because Modi needed tailwind for his U.S trip to succeed?
- Is the new 15 percent corporate tax rate the lead story?
- Can it significantly alter the competitive dynamics in several industries?
- What do the corporate tax rate cuts tell us about Modi’s economic policy for the next 5 years?
Ridham Desai, managing director and head of equity research at Morgan Stanley India, believes the tax cuts are a “game changing” move and argues that they can be more beneficial than short-term measures to boost consumption.
Listen in to the podcast here:
Click here for the SoundCloud link