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'Woo Private Sector, Keep Corporate Tax At 10%'

Today, the private sector feels harassed. They, instead, need to be wooed. So many people are going abroad. Create incentives for them. Corporate taxes should be no more than 10 per cent

Photo Credit : Ritesh Sharma

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The economic scene today looks gloomy.

I had given the first hint of a slowdown in an op-ed in The Hindu in 2015.

Today such is the gloom that any financial institution can collapse. The MSME sector has been adversely affected.

It seems those in charge have no clue as to what’s happening. Of course, the PM doesn’t have to be trained in formal economics.
But it’s a different matter with Finance Ministers. Arun Jaitley had no formal training in economics.

Nirmala Sitharaman has not gone to the field of technical economics.

Even Raghuram Rajan was a ‘management type’, not an economist. To keep inflation down, he kept on raising interest rates, which made the cost of capital for SMEs unbearable.

It may be fashionable to put spins, but the fact is that the media today is subdued and scared. People in the field of economics want jobs, so they don’t want to say anything against the government.

In my forthcoming book, I list 12 steps to boost the economy. Some of them are what I have always believed in – like the abolition of income tax.

We need measures that will enthuse the public. I would say, bring down the prime lending rate to 9 per cent. Raise Fixed Deposit interest rates to 9 per cent.

If need be, print notes. Fiscal deficit in not an Indian concept at all.

In addition, I would say the Modi government should set an example through anti-corruption measures. A few very powerful people who are wrongdoers should be sent behind bars.

Today, the private sector feels harassed. They, instead, need to be wooed. So many people are going abroad. Create incentives for them. Corporate taxes should be no more than 10 per cent.

The recently announced punitive measures for CSR violations are plain ridiculous.

As for the $5 trillion economy vision by 2024, I think no one has done their basic math. Can we grow at 16 per cent for the next five years? Impossible!  

(As told to Suman K. Jha)

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Subramanian Swamy

The author is Economist, BJP leader & former Union cabinet minister

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