NITI Aayog Vice-Chairman Rajiv Kumar told NDTV that he is confident that the government is considering demands from industry for a cut in personal income tax rates. "I have heard that there are demands of personal income tax rate cuts and I am fully confident that the government is holding consultations and discussions on this matter," Mr Kumar told NDTV. The comments from Mr Kumar come a day after industrialist Adi Godrej echoed similar views and called for a reduction in income tax to spur consumption.
Mr Godrej, chairman of the Godrej Group, had said on Thursday that the government should introduce a stimulus package as well as lower income tax rates to boost consumption in the economy.
"We should aim to revive GDP growth by the third or fourth quarter of the current financial year... A stimulus package is essential... There should be good GDP growth," said Mr Godrej.
The government has over the past month and a half announced measures - such as withdrawal of higher taxes on foreign investors, a mega bank consolidation plan and a reduction in corporate taxes - to revive consumption and spur growth.
Since August 23, when the government withdrew higher taxes on foreign investors as announced in Budget, the government has held talks with various sectors and brought in steps aimed at boosting consumption and investments.
The Reserve Bank of India on Friday lowered the country's growth outlook and projected the economy to grow at 6.1 per cent from its earlier projection of 6.9 per cent for the current financial year. Terming Reserve Bank of India's move to lower growth projection as turning "aggressively cautious" Mr Kumar said as per NITI Aayog estimates the economy will grow at 6.5 per cent.
"The government is likely to take more steps to revive the economy and more policies will be changed," Mr Kumar said. He added that by the third or fourth quarter of current financial year the economic growth will start picking up.
India's GDP growth in April-June slid to a more than six-year low of 5 per cent, prompting the government to step in and announce measures to boost the economy.