A cut in income tax will naturally mean a loss of revenue for the government, which will impact the fiscal deficit. The quantum of the revenue loss will depend on how deep the tax cut is.
Finance Minister Nirmala Sitharaman has said that the government is considering cutting tax rates to revive growth. “Tax rate cut is one among the many things we are thinking to boost growth,” Sitharaman said at The Hindustan Times Leadership Summit on Saturday (December 7), according to a report in the Hindustan Times.
“Fiscal discipline is a law. I have to obey the act. I have to go by the glide path given to me from 2014 if not 2004. The learned economists are telling us that we have to pause the fiscal discipline and move towards more fiscal stimulus,” Sitharaman said.
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