Deceleration & Descent of various sectors have been a matter of concern for Prime Minister and Finance Minister of the nation and so they have been pressing pedals to revamp the economic scenario which can give wings to soar to all the sectors.
The Finance Minister and the officials of Prime Minister have been meeting & putting the heads of different stakeholders together over the last week to figure out the stagnation which is blowing negative impacts on multiple sectors at present.
In the scenario when the economy of India is constantly showcasing a downward trend, the chairman of the Prime Minister’s Economic Advisory Council – Bibek Debroy suggested the formation of authorised body, like that of GST Council – a decision making body, for the Centre and states which can set its eye on public expenditure and strategize it to bring in the maximum productivity and profits.
He shed light on the astounding success of the GST Council and said, “This (GST Council) was about indirect taxes. Time has now come for a similar body on public expenditure to do exactly what the GST Council did for taxes. This body should decide on what should be public expenditure.”
According to him, a line can not be drawn for the public expenditure because of the presence of fiscal consolidation issues, however, the Centre and States together can yield utmost efficiency with the calculated and concentrated spending.
Debroy said, “There are questions within the PM EAC on whether the slowdown is ‘cyclical’ or ‘structural’ in nature,” & recommended the augmentation of fiscal deficit. “If I just look at it from an academic point of view, I’d probably say, yes, to expanding the fisc. But looking at the past, the moment you open the tap, there is no controlling it,” he said.
PM EAC Chairman said that some GST measures such as streamlining & coordinating the GST rates, cutting down direct tax rates can be taken by the Government of India (GOI).
He made a statement, “A lot can be done on GST. As an economist, I would argue, there should be a single GST rate. In practice, it is impossible. No country in the world has a single GST rate. From a pragmatic point of view, we must have three GST rates. For illustrative purposes, say 6%, 12% and 18%. Everyone wants the 24% to come down to 18%, but no one wants the items under 0% to come under 6%,”.
He laid stress on the curtailment direct tax and added that it can only be possible when both the corporate and income tax exemptions are knocked off completely.
He made a recommendation against sectoral tax sops as well and said, “We should not have any sector-specific interventions. These will create distortions. Fiscal concessions to specific sectors will complicate the tax story even further,”.
