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Coming to GST rates there is a great opportunity for the Government to rationalize them into just 2 categories: essential & non-essential, with GST of 5% and 15%.
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"India is a large consumption-led economy. We expect the Government to focus more on the demand side by launching every stimulant relevant to kick start the growth engines. The good news is the forex reserves of the Government continue to soar high at around $ 600 Billion, the highest ever. The monsoon is much on track propelling excellent agriculture output. The Indian currency is strong.
With stepped up infra spending, sops for industries for cost-effective production and placing more money in the hands of the large population through tax cuts can work the magic to put GDP back on 8% growth track from April 2021 onwards. There is an urgent need to clear all Government dues on subsidies, vendor payments and other outflows of cash to make Government customers happy and that in turn will spur spending and growth.
Real Estate is the 2nd largest employer in India. The policies announced for this sector during the thick of pandemic last year are not effective to help revive demand. The best way is to introduce more tax concessions on investment in housing. India is always Infra hungry with so much more to do on the Power sector, Roads, Railways, Ports, airports etc. Reforms in these sectors in terms of privatization can lead to better investment attraction and enhanced competition leading to growth.
Coming to GST rates there is a great opportunity for the Government to rationalize them into just 2 categories: essential & non-essential, with GST of 5% and 15%. That way the end consumer costs become affordable and will surely spur more demand leading to growth. To tax essentials like Bathroom products in a country where hygiene levels are so low, is a big mistake continuing to happen. Here's an opportunity to correct that and pave the way for a Hygienic India and keep bacteria and viruses away forever.
Clearly, the Government must use the Budget to BUY GROWTH in 2021-22. Even at the cost of depleting financial resources as Investment today, will pay rich dividends tomorrow for India. The mantra for this budget should be SPEND, SPEND & SPEND, at Government level and Consumer level. While spending from the Government side is in its hand, making the consumer spend is what the Government can make happen thru Sops.
Overall, we expect the Budget to be path breaking and doing special things to put the economy back on track to the growth of 8-10% in 2021-22."
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