Mumbai: Manish Chokhani, director, Enam Holdings pitched for a cut in dividend distribution tax on Monday.
Speaking at the Times Network India Economic Conclave 2019, Chokhani said investors were paying tax up to 56% of the profits they earned through dividends. “The government can follow the same approach they followed during the corporate tax cuts. Take out all the exemptions and bring down the overall tax paid,” he said.
He also asked whether having forex reserves of $450 billion was the best use of resources since it comprised 15% of India’s GDP.
Commenting on the slowdown in the automobile sector, Chokhani said revival of growth would take time. “The problem with the auto sector is twofold. Due to the introduction of new emission standards, there is an uncertainty on the resale value of cars,” he said. “Auto dealers used the cheap money they use to get from banks and NBFCs (non-banking financial companies) to invest in sectors like real estate.”
Chokhani also said that the weakening rupee had hit economic growth. “Rupee has depreciated 70% since 2008. Due to the weak rupee, India is importing inflation. Had rupee not fallen in the last decade India would have already been a $5 trillion economy by now,” he said.
He also expressed hope that the divestment drive being undertaken by the government would provide stimulus to the economy.
Source: Economic Times