The tax cuts also focus on India's strength — it's a hugely significant market, something which investors have been targeting for long. A lower tax for startups would mean that they can focus more on attracting investors — at least have the financial means to spread out in the fields of innovation and service that could use funding rounds. Besides, the angel funding for startups, lately, has taken a dip as well. According to Inc42, the number of angel investors deals in India tumble down in 2017 by 22%, while In 2018, the number of unique angel investors saw a 42% drop compared to 2016 and a 30% drop compared to 2017.
It has also been stated that the improvements in education standards to garner better skill sets and to improve the overall infrastructure in which companies tend to operate, can also have a direct impact on the growth of these companies.
However, a system which complements the work sphere of a company, along with effective tax cuts would mean that companies can get more involved in their operations in India and try to expand their services to create more jobs.
According to the income tax department, about 100 firms forming 0.012% of the total 8,00,000 companies in the country contribute more than 40% of the collection of corporate tax in India. Between 1997 and 2019, the average corporate tax rate stood at 34.94 %. Between 1985 and 2018, the average global corporate tax rate has fallen by more than half from 49 to 24%.
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