Investors in Indian stocks grew richer by a whopping 5 trillion within minutes of finance minister Nirmala Sitharaman announcing cuts in corporate tax to stimulate the economy, which had cooled to a six-year low of 5% in the quarter ended June. India’s benchmark Sensex zoomed nearly 2,100 points, or about 6%, intra-day. Today’s jump marked the 30-share barometer’s sharpest single-day percentage gain in more than a decade. The broader Nifty, too, surged 6%. Maruti Suzuki, the country’s largest carmaker, was the top gainer on both the indices, soaring more than 15%. The minister’s wide-ranging fiscal sops, including the removal of a controversial enhanced surcharge on capital gains on the sale of securities, including derivatives by foreign portfolio investors (FPIs), gave market sentiment a fillip.

The big move, of course, is the reduction in the base corporate tax rate to 22% from 30% earlier. With the latest revisions, India’s corporate tax regime is no longer far more burdensome that that of its Asian peers. At a time when the trade war between the US and China has disrupted global supply chains, companies looking to shift manufacturing units out of China to escape America’s punishing tariffs could find India’s new tax regime attractive.

The tax relief should encourage industrialists to step up capital expenditure. The government’s revenue forgone stands at 1.45 trillion for the year, as estimated. This suggests fiscal consolidation is now off the cards, at least this year. In times of trouble, a dogmatic adherence to fiscal deficit goals does not do the economy any good. The fisc can be fixed once growth revives.

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