The Indian government is working on multiple measures like personal income tax rationalisation and another reform in the goods and services tax (GST) to boost demand and economic growth after growth in the second quarter dipped to 4.5 per cent, the lowest in over six years, finance minister Nirmala Sitharaman told the HT Leadership Summit in New Delhi last week.

Growth is expected to slow down further in the third quarter of 2019-20 as core sector activity continues to remain subdued.

Sitharaman said public sector banks disbursed ₹4.91 crore in the second quarter of 2019-20 to increase lending activity, especially in the rural belts.

"So there are ways for giving a stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on," Indian media reports quoted Sitharaman as saying.

A key reform being mulled over is rationalisation of personal income tax rates. Another move the government is looking at is streamlining GST rate structure, she said.

The original intent was to have a three-slab GST, Sitharaman added.

Fibre2Fashion News Desk (DS)

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