Bhasin is a New Delhi based policy researcher
Forecast of most experts was that the bold corporate tax cut of September 2019 would lead to a decline in tax collections, would not help economic growth. The opposite seems to have happened.
Our very conservative estimate is that absolute poverty in 2017-18 was in the low to mid-single digits — a decline of 6-8 percentage points from the 14 per cent level in 2011-12. This is indeed a happy note as we celebrate 70 years of the creation of the Indian Republic.
The RBI governor mentioned he’s willing to do “whatever it takes”. He has to follow this up. The government for its part has to nudge small savings and deposit rates lower to help transmission.
Modi Econ 2.0 has started with a big bang — the largest corporate tax cut in world history for new manufacturing firms. Surely this is just the beginning.
India has just one policy option to advance private investment and become a $5 trillion economy — reduce corporate tax rate for all firms to 22 per cent, reduce misguided rates of personal income tax.
Given the estimated poverty decline in India between 2011-12 and 2016-17, time has come to change our economic policies — concentrate on what causes growth, not what causes poverty to decline
All indicators lead to the same conclusion: Modi’s BJP recorded a spectacular victory in 2019 due to its provision of inclusive growth — very close to the best in the world in 2014-18
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