Cut In Income Tax Rate. Will It Help Economy – Free PDF Download

MONEY WITH GOVERNMENT

WHY REDUCING PIT MAY NOT SPUR DEMAND?

• First, Since most of our population is out of Income tax  bracket,
• Reducing Personal Income Tax will have limited  impact on economy.
• Second, While theoretically it is effective to spur demand  in the short-term.
• But during tough times, tendency is to save more rather than to spend.

REDUCTION IN GST RATES

• As it has wider base and every citizen pay the GST, it is one of the better option to spur demand.
• But the GST should be reduced more on the items which are consumed widely.
• At the same time, the decision now largely depends on GST

DIRECT EXPENDITURE BY GOVERNMENT

• Many experts favour higher spending on rural schemes over reducing personal income tax.
• They believe, it would have a far bigger impact on boosting the economy.
• There are several schemes which could increse benefits for unorganised labour’s.
• Mahatma Gandhi National Rural Employment Guarantee Scheme,
• Pradhan Mantri Gram Sadak Yojana (PMGSY), PM KISAN

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