Economic Survey 2020 Volume 2 – Chapter 2 (Fiscal Developments)

Table of Contents

INTRODUCTION

The year 2019-20 has been challenging for the Indian economy owing to the decelerating growth rate experienced in the first half of the year.

On Sept 20, 2019, the Government announced a major cut in the corporate income tax (CIT) rate applicable to the domestic
The existing companies have been given an option to forego certain deductions and exemptions availed under the Act and choose a new CIT rate structure with a maximum marginal rate (MMR), inclusive of surcharge and cess, of 25.17 per cent as against the existing MMR of 34.61 per cent. In order to give boost to the manufacturing sector, the new manufacturing companies registered on or after 1.10.2019 have been given an option to choose a CIT rate with MMR of 17.16 per cent.
The new CIT rate structure is available with effect from the current financial year i.e. 2019-20. However the CIT rate applicable to the foreign companies remained unchanged.

The B.E. for disinvestment proceeds for the year 2019-20 was fixed at `1.05 lakh crore.
As on 31st December 2019, the Government has mobilised `0.18 lakh crore using a variety of instruments like Initial Public Offers (IPOs), Offer for Sale (OFS), Exchange Traded Funds (ETF) etc.

Going forward, considering the urgent priority of the Government to revive growth in the economy, the fiscal deficit target may have to be relaxed for the current year.