'This trigger will lead to a virtuous cycle of investments, growth and higher employment,' FICCI president said.
The Federation of Indian Chambers of Commerce and Industry (FICCI) said on Friday that lowering of income tax on corporates will unleash the animal spirits of corporate India and reinvigorate manufacturing sector which has been going through a difficult phase of late.
"With the kind of corporate tax rate cuts announced today, India now becomes a competitive market in the region with our rates similar to those prevailing in the ASEAN countries," said FICCI President Sandip Somany.
"This trigger will lead to a virtuous cycle of investments, growth and higher employment," he said in a statement.
The additional measures announced to stabilise flow of funds to capital markets by not applying the enhanced rate of surcharge on capital gains arising from sale of equity shares and units of equity funds is another major positive.
"This will make India an even more attractive destination for funds flow and is bound to draw much greater attention from foreign institutional investors," said Somany.
At the same time, the decision to allow CSR funds to be used for supporting incubators set up by central and state governments as well as supporting universities, autonomous institutions as well as research bodies that are publicly funded clearly indicates that the government wishes to promote public private partnership in scientific research and development and make India move up the innovation ladder, he added.