The drastic corporate tax cut in 2019 and pandemic-induced cost reductions increased India Inc’s profits 105 percent in FY21 compared to FY20, despite revenue declining 5 percent, according to a report.
This also had 4,000 public companies paying a record corporate income tax, a net increase from over Rs. 50,000 billion in FY21 to $ 1.90 billion.
The government cut the effective corporate tax rate from 35 percent to 26 percent in September 2019, combined with lower spending due to the pandemic, and raised its earnings to record levels in FY21, the report said, without disclosing actual earnings numbers.
For these companies, average revenue fell just 5 percent in FY21, but their net income rose 105 percent from FY20, the report said without quantifying it.
The tax cut contributed 19 percent to sales of these companies during the pandemic, with cement, tires and consumer durables increasing more than 50 percent, she added.
More importantly, 15 sectors, led by Refineries, Steel, Fertilizers, Textiles, Pharmaceuticals, IT, Mining, etc., reduced their borrowing funds by 6-64 percent, or 2.09 lakh crore, in FY21, which added again Bottom line.