London: Leading British-Indian industrialist Gopichand Hinduja on Friday welcomed the reduction in the corporate tax rate in India, calling it "an excellent step" to revive the economy and manufacturing sector.

The co-chairman of the Hinduja Group said the government is well seized of the economic challenges facing it.

"The current reduction in corporate tax announced by Finance Minister Nirmala Sitharaman is an excellent step that is needed for the Indian economy's revival and (boosting) manufacturing sector," Hinduja said in a statement.

"I only wish more such steps which the government is already contemplating could be taken together in one go, like tapping the NRI investment, so as to create deeper impact, instil more confidence," he said.

He said the tax reduction would certainly help put businesses back on track, generate employment and keep India as the principal destination for investments amidst global slow down.

The Indian government on Friday slashed the income tax rate for companies by almost 10 percentage points to 25.17 per cent and offered a lower rate to 17.01 per cent for new manufacturing firms to boost economic growth rate from a six-year low by incentivising investments to help create jobs.

Finance Minister Sitharaman said the reduction in tax rates has been done by promulgating an ordinance to an amendment to the Income Tax Act. (PTI)

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