Finance Minister Nirmala Sitharaman would take effective measures to revive the economic slowdown and to overcome the lower revenue and poor fiscal deficit as well. All eyes are on the upcoming 2020 Financial Budget and are going to be present on Feb 1 this year. According to the CSO’s estimate, The GDP has almost fallen to 5 Percent by 2019-2020. , lowest since 2008-9. Economic slowdown’s in results, lower Investments, scars in small and medium level entrepreneurship weak consumption, Lower revenue, pressure on fiscal deficit. Social Unrest and the blame game by the opposition is on-trend to court the government whereas the finance ministry has constantly reverted the allegation by projecting the tepid global economy cause for the slowdown in India’s GDP. Now, As the annual Budget is to be presented, The Economic Times reported that 5 effective measures FM can take to overcome the economic slowdown.

1) Relax fiscal consolidation target and increase spending. 

The Budgeted fiscal deficit target for the current financial year was 3.3%. But actual fiscal deficit for the current financial year would be around 5% due to the lower revenue. Even if the fiscal deficit is going to be much higher than anticipated, economists believe higher government spending on infrastructure and social sector can help revive rural demand, which is one of the driving factors of consumption demand. Once growth revives, fiscal deficit can be managed in the coming years, as per the experts.

2) Reduce personal income tax rates

As per the Expert’s believes, The reduction in the Income-tax rates will be beneficial for the consumer, as they will have more money in their pocket will ultimately escalate the consumption rates to be in higher statistics. The Direct Tax Code has suggested 10% income tax rate on income between Rs 2.5-Rs 10 lakh as against a rate of 5% on income between Rs 2.5-Rs 5 lakh and 20% on income between Rs 5-Rs 10 lakh. Income between Rs 10-Rs 20 lakh should be taxed at the rate of 20%, suggests DTC. It is the belive of the economist that the Personal Income tax reduction steps are to be taken by the government will surely hit the Production Cycle as the demand in the economy will spur.

3) Higher disinvestment to raise funds for investment

Economists are expecting the Government Stake Selling policy in PSU’s (Public sector Undertakings) will ultimately raise the capital. PSUs like (PSUs) like BPCL, Air India, SCIL and Concor can take the Government Stake selling The Government can also consider selling its stake in Axis Bank and ITC held through SUUTI.

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