The Congress spokesperson Gaurav Vallabh on Friday has said that the Union government should be focused on job-creating sectors. Addressing a press conference, he said the focus should be on the revival of sectors which can contribute more in terms of creating jobs, such as real estate, construction, garments and textile. He also said that the Goods and Services Tax (GST) structure should be reformed and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) schemes should get more funds. 

'Economy needs major surgery'

"While the economy needs major surgery, the government is assuming it to be common cold caught from global headwinds which could be easily cured by a balm," he said. He further said that the Central government should acknowledge that the problem was becoming deeper and act by going beyond 'headline management' and 'tepid press conferences'. 

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Speaking on the GST reforms Vallabh suggested that the filing of the returns must be made easier and the government should also consider improving the rate slabs. "Reduce delay in GST refunds of exporters as well as the domestic industry and ensure that they walk the talk. Strengthen MGNREGA by providing more resources so that liquidity reaches the last person," Vallabh said. 

Vallabh claimed that the fiscal deficit as per the CAG was 5.85 per cent and not what the Government had prior stated. He said that the government had already used up more than 77 per cent of the annual target in the first four months and at the end, the fiscal deficit was likely to be higher. 

READ | Corporate Tax Slashed Down To 25.17 Pc For Domestic Companies

Corporate tax slashed down for domestic companies

In a major fiscal booster, the government on Friday has slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies. Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1. The current corporate tax has been brought down from 30% to 22%. For the listed companies that have announced buyback before July 5, 2019, tax on buyback of shares will not be charged. The higher surcharge will not apply on capital gains on the sale of security including derivatives held by Foreign Portfolio Investments. Sitharaman stated that these amendments would be brought into action via the Ordinance route.  

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Other new reforms

Earlier, the government had introduced a slew of reforms impacting the automobile, Medium, Micro and Small Enterprises (MSMEs), tax and other sectors on August 23. This included the promise to initiate the scrappage policy, lifting the ban on government departments to purchase new vehicles, extending the operational period of BS-IV vehicles and cheaper loans. Sitharaman said that banks would pass on the Reserve Bank of India rate cut benefits to borrowers. Moreover, to tackle the menace of ‘tax terrorism’, a centralized system for Income Tax notices was promulgated. 

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(with PTI inputs)