Budget 2025: Economists urge Modi to cut income tax rates
What's the story
Leading economists have urged Prime Minister Narendra Modi to consider slashing income tax rates in the upcoming Budget 2025.
The proposal was made during a meeting themed "Maintaining India's Growth Momentum at a Time of Global Uncertainty."
The economists also suggested rationalizing customs tariffs and implementing measures to bolster exports, the Economic Times reported on Wednesday.
Policy focus
Modi emphasizes employment generation in policy-making
During the meeting, Modi stressed on employment generation being the fulcrum of government policy. He also highlighted the need to improve data quality to improve policy outcomes.
The economists who attended this discussion included Surjit S Bhalla, Ashok Gulati, and Sudipto Mundle, among others. They suggested ways to create sustainable job opportunities, especially for the youth.
Strategy proposal
Economists propose strategies to tackle global economic challenges
The economists also suggested strategies to tackle global economic challenges and geopolitical tensions.
These included aligning education and training with evolving market needs, targeted interventions for skills development, boosting agricultural productivity, and maintaining capital expenditure.
The proposals were made considering India's slowing domestic consumption and persistent inflation issues.
Economic slowdown
India's economic growth slows amid inflation concerns
India's economy recently recorded its slowest growth in nearly two years, with the gross domestic product (GDP) growing by just 5.4% in the three months to September from a year earlier.
This is way below the central bank's projection of 7% for the period.
Meanwhile, inflation has been squeezing household budgets, limiting disposable income and restricting discretionary spending.
Tax reforms
Industry bodies propose comprehensive tax reforms for growth
To boost economic growth, industry bodies have suggested comprehensive tax reforms, simplified compliance procedures, and the introduction of GST 2.0.
The proposals were made during pre-budget consultations by industry bodies including CII, FICCI, and PHDCCI.
The suggestions included rationalizing the capital gains tax regime, reducing TDS provisions, and setting up a dedicated dispute resolution mechanism.