PM Modi on the sidelines of the RCEP Summit hinted at a review of the tax rate of the individuals. Soon after the announcement of the corporate tax rate cut, India, in a move to accelerate the diving economy, aims to couple the effort through supporting the consumer demand by easing tax rates.
Crux of the Matter
India’s Economy nosedived to the growth rate of only 5% in the quarter ending in June, a rate that is the lowest in last 6 years.
The Government, in the month of October, had slashed Corporate tax rate to revive the economy through pushing businesses.
On the other hand, India is looking for measures on the Demand Side, increasing consumer demand, for which a rate cut in individual taxes is being discussed.
For PM Modi’s vision to make India a $5 trillion economy by 2025, the next toll check of the economy on November 29 is seen as a crucial one towards the development of a people-friendly tax system.
Curiopedia
Dealing with Economic Slowdown – The government has been struggling with finding the optimal measures to combat the slowing economy. What needs to be understood before creating a policy or finding a remedy is the root cause of the issue. Often economists have relied on the practice of mining the problems, either from the demand side or the supply side, or sometimes from both. India needs to tackle what some call a cyclical slowdown through appropriate demand-side measures. Read a Detailed Academic Analysis
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