The savings rate, expressed as a percentage of the gross domestic product, reflects the pool of investible funds within the country that are available for the government and private businesses to use for investment purposes.
The government’s plan to gradually get rid of all exemptions and deductions under the personal income tax regime — in a bid to provide lower taxes and a simplified tax architecture as well as to boost consumption — will almost certainly hurt the already falling rate of savings rate in the Indian economy.
What’s more, several sectors such as the cash-strapped real estate sector, as well as insurance sector, are also likely to feel an adverse impact of the move in which Union Finance Minister Nirmala Sitharaman offered an alternative income tax regime bereft of all exemptions and deductions but with lower income tax rates.
Please click here to read more.