New Delhi: As soon as the newly elected Modi government resumes power, it needs to hit the ground running as bringing back the economy on track will be its biggest challenge.
The Economic Times citing government officials said a plan to kickstart private investment and stimulate demand has already been drawn up as the incoming administration gets ready to present a full budget in July. Government officials said there is concern that any delays will intensify the current slowdown.
“There is no time to be lost,” the ET report quoted one of the officials as saying. The finance ministry and other departments have already prepared measures aimed at stimulating the economy that need to be taken by the new government.
It is expected that India's economic growth has likely slowed down to 6.5% in the fourth quarter of last fiscal as the annual forecast for the full year growth is 7%. Slowing car sales in recent months, slowdown in consumer goods sector suggests waning demand as private investment is missing.
Officials say the budget is likely to be presented in early July and could, as was promised in the interim budget, cut personal taxes to put more money in the hands of the middle class, thus persuading people to spend more and drive up demand.
The draft of a new industrial policy is ready for rollout, the officials said. The new industrial policy seeks to encourage the Make in India manufacturing initiative as well as the development of industrial infrastructure.
The government may come out with measures to push public investment in infrastructure as private sector investment may take time to kick in.
The business daily mentioned some internal discussions have already taken place within the government on goods and services tax (GST) 2.0, which will include easing compliance, a review of the rate structure to simplify it and a plan to bring items such as petroleum under GST’s ambit. Four slabs of GST - 5%, 12%, 18% and 28% -could be converged to two main rates, the publication mentioned.
Cement continues to be in the highest 28% bracket along with automobiles and rates on these items could be looked at with GST revenues stabilising. The measures also include giving an impetus to exports, which has been a laggard thus far.
The ET report citing another official said the government will build upon what has been achieved so far. Measures for improvement in ease of doing business and the startup framework have also been drawn up to make it easier for entrepreneurs to set up businesses.
Published On : 24-05-2019
Source : Times Now News
