India's finance chief hints at more interventions amid dismal growth
$5T economy target comes under heavy scrutiny after weak economic expansion in last two quarters
Indian Finance Minister Nirmala Sitharaman said on Saturday that several significant steps in structural reforms have been taken in the past few months and responses/interventions addressing the needs of the economy will continue, indicating more relief measures could be on the anvil, if so needed.
Her statement came a day after it was announced that the GDP growth rate of the country went down to 4.5 per cent, slowest in over six years.
"Today, we mark the completion of six months of the second term of @PMOIndia @narendramodi. Several significant steps in structural reforms have been taken in these months.Responses/interventions addressing the needs of the economy will continue," Sitharaman tweeted in response to a tweet by Prime Minister Narendra Modi.
"It is 6 months of 2nd term of PM Modi. These #6MonthsOfIndiaFirst have given India a phenomenal reform momentum" was the tweet from the Prime Minister.
Interestingly, Modi has also listed most economic steps of the government, saying India is on track of becoming a $5 trillion economy by 2024.
That target has come under heavy scrutiny after the dismal growth in the last two quarters, marking the six months of the current government though part of the April-June quarter fell into the last government duration which was also the NDA government.
Former RBI governor and noted economist C. Rangarajan has said the $5 trillion target simply out of the question by 2025 at the current growth rate. While first-quarter growth slipped to a six-year low of 5 per cent, second quarter growth has further slid to 4.5 per cent.
Even the RBI has lowered its growth full-year forecast in two months to 6.1 per cent in its October policy review.
As on steps, Sitharaman slashed the corporate tax rate to 22 per cent from 30 per cent for existing companies, and to 15 per cent from 25 per cent for new manufacturing companies.
Including a surcharge and cess, the effective tax rate for existing companies would now come down to 25.17 per cent from 35 per cent. Companies can opt for the higher tax rates or the new ones.
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