Friday’s big rally in the Sensex came after the index lost around 3,800 points from 39,908 after the presentation of the Union Budget on July 5, amid worries over the deepening slowdown in the economy.
When asked about the impact of the measures on the fiscal deficit, Finance Minister Nirmala Sitharaman said the government is conscious of the impact and expects the economic buoyancy resulting from these changes to generate significant resources.
Finance Minister Nirmala Sitharaman Friday announced a new corporate tax rate of 22 per cent without exemptions and said the effective tax rate including surcharge and cess would now stand at 25.17 per cent.
"This is a bold and welcome decision. During Arun Jaitley's tenure as FM, the corporate tax was reduced from 30 to 25 per cent. This was one of the hurdles, and the measures will help revive the economy," the RBI Governor said.
From the 30-share Sensex basket, barring NTPC, all other 29 scrips were trading in the green led by Tata Steel, Maruti Suzuki India, HDFC Bank and Yes Bank, which were trading with gains of up to 5.7 per cent.
To stabilise the flow of funds into the market, the enhanced surcharge announced in Budget 2019 will not apply on capital gains arising on sale of any security, including derivatives by foreign portfolio investors, the Centre announced.