Survey cuts FY17 growth to 6.5%, urges lower tax
NEW DELHI: Feb 1, 2017, DHNS
This year’s Economic Survey has suggested a cut in tax rates to reverse the decline in growth caused by demonetisation. Presented in Parliament on Tuesday, the document for 2016-17 said growth in the current fiscal was likely to decelerate to 6.5% from the earlier projection of 7.1%.
Policy support in the Budget, scheduled for Wednesday, could help the growth return to between 6.75% and 7.5% in 2017-18, it noted. Comparing demonetisation to a stick, the Survey said the government should use GST, lower taxes and better tax implementation as carrots to complement it.
“The follow-up actions to minimise the costs and maximise the benefits include fast, demand-driven remonetisation, (and) further tax reforms,” the Survey, presented in Parliament by Finance Minister Arun Jaitley, said.
The Survey recommends bringing land and real estate under GST. It also advocates a reduction in stamp duties and corporate tax, and says the government must allay “anxieties about over-zealous tax administration.” The government should think of universal basic income (UBI), the survey says, describing it as the “fastest way to reduce poverty.”
For 2017-18, the survey strikes a note of caution on inflation that could be caused by higher crude prices. “Oil price rise to $60-65 per barrel could lead to reduction in consumption in India, less room for public investment and lower corporate margins, thereby further denting private investment,” it warned.
Policy support in the Budget, scheduled for Wednesday, could help the growth return to between 6.75% and 7.5% in 2017-18, it noted. Comparing demonetisation to a stick, the Survey said the government should use GST, lower taxes and better tax implementation as carrots to complement it.
“The follow-up actions to minimise the costs and maximise the benefits include fast, demand-driven remonetisation, (and) further tax reforms,” the Survey, presented in Parliament by Finance Minister Arun Jaitley, said.
The Survey recommends bringing land and real estate under GST. It also advocates a reduction in stamp duties and corporate tax, and says the government must allay “anxieties about over-zealous tax administration.” The government should think of universal basic income (UBI), the survey says, describing it as the “fastest way to reduce poverty.”
For 2017-18, the survey strikes a note of caution on inflation that could be caused by higher crude prices. “Oil price rise to $60-65 per barrel could lead to reduction in consumption in India, less room for public investment and lower corporate margins, thereby further denting private investment,” it warned.
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