The government must try and increase the GST threshold to Rs 5 crore and also work towards lowering the average GST rates from the present 14% to spur demand, an economist said.
With the Union government rolling out two rounds of stimulus in two days, Soumya Kanti Ghosh, group chief economic advisor, SBI, has suggested that the government also lower the automotive fuel prices by 30%, which will have its own set of benefits to increase demand.
Speaking at a webinar of Bennett University, sponsored by Darwin Industries on Demand Management Policies at the Time of Pandemic (Fiscal and Monetary Stimulus), he said the aggregate demand has been impacted by the slowdown in the global economy. With no clarity on FDI inflows this year and next year and with the fact that there is excess capacity in the system due to deficient demand, the government must consider options.
