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Govt. May Increase Tax Rates To Overcome Fiscal Deficit

The Indian Government may make some he changes in the upcoming financial budget, by increasing the tax rates. On the other hand, the government is giving room to the Reserve Bank of India to decrease the tax rates for sustaining higher growth, the Reuters reported Friday, said Pronob Sen, principle advisor to the Planning Commission.

Indian Economy

 The hike in rates may be to the degree of a full rollback of the incentive package, which was implemented in 2008 to contain the impact of the global recession on the Indian economy.

“One of the possibilities is full rollback of the stimulus that is almost 1% of the GDP (gross domestic product),” Sen said.

Sen also added that, the excise duty and service taxes can contribute in the Indian economy up to 1% growth. He said, “”There is space. The space is basically raising excise duties.”

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