Economics
India's Budget Squeeze May Put Corporate Tax Cuts on Hold
- Prime minister had pledged to lower tax rate to 25% from 30%
- Budget deficit remains under pressure amid weak revenue
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Businesses waiting for Indian Prime Minister Narendra Modi to follow through on a pledge to cut corporate taxes may need to wait a bit longer.
In his last full budget before 2019 elections, Modi is facing a revenue squeeze that may make it difficult to deliver on a promise to lower the basic corporate tax rate over time to 25 percent from 30 percent. It’s a catch-22 situation for the premier, who is also trying to lure foreign investors at a time when the U.S., U.K. and other countries are lowering business taxes.