Finance Minister Arun Jaitley should cut direct taxes in the upcoming Union Budget, a move that could make India more competitive and also boost the government's Make in India push, feels Adi Godrej, chairman of Godrej Group.
In an exclusive interaction with THE WEEK, Godrej is hopeful that this budget, coming on the back of the early hiccups from the Goods and Service Tax (GST) rollout, will be a growth oriented Budget. India's GDP growth hit a three-year low of 5.7 percent in the April-June quarter and while it did rebound to 6.3 percent in July-Sept, but its still far away from its peak.
“Generally growth has been low this year. So clearly, that should be the major focus of the Budget to ensure we have strong growth in the next financial year,” he said.
The tax cuts in a way could be a lever to aid growth, as it will encourage manufacturing activity. The US government recently announced sweeping tax cuts in a bid to make doing business in America more attractive. Godrej, feels that India needs to do the same, a move he says will also boost tax collections over time.
“The US has reduced its direct taxes and if we do not do the same, which has been promised for a long time, we will not remain competitive... We should realize that lower rate of taxes will give more income, because economy will do better, incomes will rise and government's collections will rise and not reduce,” said Godrej. – The Week