Hyderabad: Narendra Modi-led NDA Government's decision to forego Rs. 1,45,000 crore to the exchequer cheered the stock market and helped in adding approximately Rs. 7 lakh crore notional value to the listed companies in the market.
In a major bonanza for the corporate, Finance Minister Nirmala Sitharaman on Friday announced a reduction in corporate tax rates and relaxations to corporate social responsibility (CSR) spending. Since taxation related measures need approval from the Parliament, the Government took the Ordinance route to give effect to these decisions.
The bull market led the market capitalisation of the BSE-listed companies to soar Rs 6,82,938.6 crore to Rs 1,45,37,378.01 crore in a single day.
As per the announcements, corporate tax for existing investments was reduced to 22%, while the new investments will attract 15% tax. Besides, the government has expanded the scope of CSR spending. Now CSR 2% fund can be spent on incubators funded by government agencies, Public Sector Undertakings, public-funded Universities, IITs, etc.
These tax incentives boosted the otherwise sluggish market sentiment. The benchmark indices logged its biggest intra-day spike in over a decade. The 30-share index soared 2,284.55 points to a peak of 38,378.02, before settling 1,921.15 points or 5.32 per cent higher at 38,014.62.
Similarly, the broader NSE Nifty zoomed 569.40 points or 5.32 per cent to end at 11,274.20.
As per the data available on the BSE website, the market capitalisation of all the BSE listed companies surged to 145.36 lakh crore compared with Rs 138.54 lakh crore on Thursday, which is around Rs. 7 lakh crore rise.
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