Tackling the economic slowdown
• Growth matters in India as a large number of persons have to make do with far too few goods and services as it is which is how poverty is defined.
• Note that these goods also include public goods or goods that are accessed by the entire populace of a country, such as parks, roads and bridges.
• Since these public goods are provided by government, the government needs tax revenues to supply them, and these depend upon national income.
Then there is employment.
• A demand for labour exists only when there is a demand for goods. So growth is necessary if employment is to be assured.
• India not only has a pool of unemployed persons to absorb but we also need to provide employment to youth continuously entering the labour force.
• From this point of view, the slowing of the economy is a source of concern.
Measures to be taken:
• The correct approach would be to aim to balance the budget over the growth cycle.
• The next immediate thing to do is to expand public investment in
infrastructure.
• Repair and reconstruction of India’s creaking infrastructure is the direction
in which greater public investment must now.
in which greater public investment must now.
• It is the most direct and potent measure that can be undertaken to address the slowdown the economy is experiencing.
Fewer GST slabs
possible after rise in revenue: Jaitley
• Bigger reforms such as lower number of slabs under the Goods and Services Tax (GST) regime can be considered once there is revenue buoyancy.
• At present, GST slabs have rates of 5%, 12%, 18% and 28%
About Admin MC3
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