Union Economy Minister Nirmala Sitharaman on Saturday indicated that to revive the ailing economy, the Center is trying to reduce personal income tax rates in the upcoming budget.
Tax rate cut is one among the many things we are thinking about to boost growth, Sitharaman said in her address at HT Leadership Summit.
When asked about the timeline for relief on personal income tax, the minister said “wait for the budget.”
India’s economy grew 4.5 percent in the July-September quarter of this fiscal, the slowest pace in the last seven years.
Although the Center has announced several measures to revive growth in the last four months, these are still with results. Both economists and India Inc have suggested that the government provide more fiscal stimulus, so that consumers have more money in their hands, which will increase consumption.
During pre-budget deliberations, the Indian government has recommended adopting an expansionary fiscal policy to allow the fiscal deficit to increase from 0.5 percent to 0.75 percent of GDP beyond the FRBM targets, which they claim will give the government additional fiscal space of about Rs1.1 – 1.6 lakh crore.
This additional fiscal space shoud be used for investing in capex, particularly in infrastructure. While getting back to the FRBM targets, there should be a glide path to return to the FRBM target over a period of 2-3 years.The Confederation of Indian Industries.
On economics slowdown, Nirmala Sitharaman said it is “sector-specific” and that she would like to believe there is a recovery in some sectors, while some sectors still ned some help.
My attention will only on making sure more is done towards greater stimulus. If from that the message of bottoming out comes, then it is good, but I will not let that distract me.Nirmala Sitharaman, Finance Minister.