Finance Minister (FM) Nirmala Sitharaman on Friday slashed corporate tax rates. SN Subrahmanyam, MD and CEO at Larsen & Toubro (L&T), shared his views on the announcement.

“What the FM and the government has done is probably the single biggest tax reform since one ever knows. This is a fantastic moment from all points of view. This is a transformational intent and the content out of it would be multifarious and reactions would be numerous from many points of view,” Subrahmanyam told CNBC-TV18 on Monday.

“Something like this is required by the private sector because last three-four years we have been lacking private sector investments for various reasons. therefore, in some manner, ensuring that the private profit and loss (P&L) gets back into shape to give credit back into the private sector P&L accounts and to have cash flows in a very positive manner is very important,” he added.

“There would be a lot of positive effects due to this, may not be immediate but it will happen over a period of time which is what all the stimulus does. Therefore L&T will also benefit. We need to get into the details because there are other aspects to it. Therefore, one has to straighten that out before finally arriving at what would be the net number. Let us see all the positives in it at the moment. It is a fantastic stimulant from that point of view,” said Subrahmanyam.

The buyback tax has been revised and the Securities and Exchange Board of India (Sebi) has released revised norms for calculation of buyback. When asked if the company is still planning to do a buyback or post the Mindtree acquisition the buyback is off the table, he replied, “Buyback is always an option because, in an organisation like us, we always think about investors and the returns to the investors. One needs to be conscious that we did attempt it. For some reasons of internal calculations, it was not moved forward. Though the overall scheme has been announced, the devil is in the details as always. One needs to see how this 1:6 and other criteria that have been put there, works out and if it is favourably disposed of towards this, we will definitely go back to what we thought about at that time for sure.”

“We have been positive about the things that have moved. In the last few years, there has been a fundamental shift in investments. We are benefitted from the huge amount of electrification schemes that have grown, we are benefitted from the fair amount of road sector growth that has grown, we are benefitted from some of the huge investments that have grown,” he added.

“We have done around 85,000 villages electrified. If you see India map seven-eight years back especially the northern and eastern part of the country and if you see the India map through a satellite today, you will find much of the areas electrified today. That is a tremendous achievement for an economy and for a country like ours,” Subrahmanyam said.