Do you think the current growth momentum, at around 7%, can be sustained till 2030 without a significant boost to demand and consumption?
What happens to India in the aggregate is a function of what is happening at the level of states. The Indian government is really a sigma of state GSDP [gross state domestic product] apart from things like defence, railways and national highways. A lot of states today are performing far below potential, there is a lot of slack.
The growth drivers have to be consumption and private investments. One of the problems of saying anything about the Indian economy is that there are time lags in data. But my reading is investments and consumption are showing signs of recovery. I am reasonably confident that in the next five years, we will have a growth rate of 7%.
Do you not think it is time for India to lower income taxes and remove exemptions to boost consumption?
Whenever I try to reduce taxes to boost consumption, I am doing two different things: firstly, I am creating discretion because I am not reducing it across the board, so there are distortions; and secondly, all resources have opportunity costs-this means whenever I am cutting taxes, I cannot spend that money on something else.
Broadly speaking, there are multiplier effects from cutting taxes, increasing revenue expenditure and capital expenditure. The multiplier effects, theoretically as well as empirically, are greater for capital expenditure, lower for revenue expenditure and lowest for cutting taxes. One reason why I think we have done relatively well post-Covid and lockdown compared to some countries in the West is because we have not cut taxes.
Diese Geschichte stammt aus der May 2024-Ausgabe von Outlook Business.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der May 2024-Ausgabe von Outlook Business.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
The New Imperialism
The EU has approved a new environmental regulation that will impact global value chains. Small businesses will have to bear the brunt
VISION FOR THE INDIA OF 2047
In India@100, Krishnamurthy Subramanian argues that India can be a 55trn economy by 2047 if it doubles down on the economic policies implemented in the last decade to grow at 8% annually. Although middle-income trap has plagued many developing countries in the past, he is convinced that India is well-equipped to avoid obstacles in its growth odyssey
BUSINESS MINT: CELEBRATING EXCELLENCE, ONE AWARD AT A TIME
Ensuring that Firms and Entrepreneurs Receive the Recognition they Deserve since 2018
DR. PAVANI KADIYALA: DRIVING INNOVATION AND TECHNOLOGICAL ADVANCEMENT IN EMERGING INDUSTRIES
Celebrating Dr. Pavani Kadiyala's Accolades and Contributions to Emerging Technologies
INSPIRING EXCELLENCE: THE JOURNEY OF NALANDA EDUCATIONAL INSTITUTIONS:
Honoring the Vision of Sri Manthena Suryanarayana Raju Through Innovation and Holistic Development
THE RISE OF VARUN REALTORS
Leading the Charge: Varun Kaliga Named Emerging Real Estate Influencer of the Year for Innovative Impact
R.C. RATUL: BRIDGING THE WORLDS OF ENTERTAINMENT AND REAL ESTATE
The Visionary Behind the Convergence of Entertainment and Real Estate
CYBERABAD BUILDERS ASSOCIATION: LEADING THE CHARGE IN SHAPING
Recognized as the Emerging Builders Association of the Year 2024,’ CBA is setting new benchmarks in real estate and construction excellence in the heart of Hyderabad.
FROM PAPERBOY TO POWERHOUSE: THE INSPIRATIONAL JOURNEY OF VENU KALYAN
Celebrated with the Most Admired Real Estate Sales Coach of the Year 2024’ Award for Transformative Impact and Innovative Coaching
OUTLINE MEDIA: SHAPING TOMORROW'S BRANDING AND ADVERTISING TODAY
Redefining Branding and Advertising