Government measures to accelerate economy |
The NDA government is stitching together a set of measures, including tax cuts and targeted sops, to reverse an economic downturn, amid fears of a global slowdown. The idea is to roll out a host of countercyclical measures, including sectoral incentives and confidence-building steps for the private sector, to stimulate the economy that is grinding through losses, layoffs and an investment freeze. The measures being considered include steps to boost infrastructure investments; goods and services tax (GST) relief to specific sectors, including the automobile sector, that could boost demand; ways to further cut red tape on cross-border trade and steps to improve ease of doing business. While the below-target tax collections and the fiscal glide path mandated by the Fiscal Responsibility and Budget Management (FRBM) Act constrained the government from providing a fiscal push in the Union budget, there is now a rethink on the approach. The escape clause in the FRBM Act, for deviation in the fiscal deficit glide path up to 50 basis points. The current economic scenario, where private investment has dried up, may warrant such a move.
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