Higher government spending, not tax cuts, is the way to boost growth | The Indian Express

Higher government spending, not tax cuts, is the way to boost growth | The Indian Express

Written by Ajit Abhayankar |Updated: October 8, 2019 9:51:31 am

Abhyankar is a CITU office bearer and CPI(M) Maharashtra state committee member.

Higher government spending, not tax cuts, is the way to boost growth

What is needed is enhanced government spending and investment, to enlarge the scope of employment guarantee to urban areas. This could save the economy from falling into a recession.

Expenditure by the central government, as a percentage of GDP, has also been falling for the last four years. (File/Illustration: C R Sasikumar)

Within three months of the budget session, unprecedented tax breaks have been announced outside Parliament, almost rewriting the tax regime. The government coffers will be lighter by Rs 1.45 lakh crore, and the nation will have to wait for the private corporate sector to rescue us from the slowdown. Surprisingly, there is a deafening silence on the issue of fiscal deficit despite the fact that the revenue forgone is more than 1 per cent of GDP.