New Delhi, Oct 3 (IANS) Leading industrialist and Godrej group Chairman Adi Godrej on Thursday said the government should not bother about fiscal deficit in slowdown times and should take steps to push growth in the second half of the fiscal while suggesting cut in income tax rates to give disposable incomes at the hands of the people.
“I expect 25 per cent cut in the RBI’s monetary policy. We have to ensure that growth revives in the second half of the year. First quarter was already poor (at 5 per cent) and second quarter may be low and won’t be much higher than 5 per cent,” Godrej toldudaipur kiranon the sidelines of India Economic Summit.
The RBI’s monetary panel will announce its decision on repo rate cut at its meeting ob Friday.
“Corporate tax cut as announced recently is a good move but more needs to be done. Personal income tax needs to be reduced. We need to get the economy going. If the growth rate does not go up, there will be problems. Even if fiscal deficit goes up, you need to push growth. Fiscal deficit can be relaxed for a short term to support growth,” Godrej said.
On September 20, Finance Minister Nirmala Sitharaman announced a reduction in the base corporate tax rate to 22 per cent from 30 per cent as part of stimulus measures to revive the slowing economic growth.
Moreover, the Goods and Services Tax (GST) collections dropped sharply to a 19-month low of Rs 91,916 crore in September, mirroring a widening slowdown in economy triggered by shrinking consumer demand.
The Q2 growth numbers are awaited, but in Q1, the GDP growth had slumped to 5-year low of 5 per cent. Recently, the core sector growth turned negative too.