Uday Kotak suggests measures to boost economy; tells how lowering tax rates may help

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Published: June 3, 2019 2:36:55 PM

With GDP growth rate in Q4FY19 hitting 5-year low, there is a need to increase private investment into the economy, a veteran businessman said.

Since both investment and consumption remain weak, the government should take measures to revive both, Uday Kotak said.

With GDP growth rate in Q4FY19 hitting 5-year low, there is a need to increase private investment into the economy, a veteran businessman said. The government could do good by lowering the income tax rate to put more money in the hands of the people, increasing domestic consumption, Uday Kotak said. Even the corporate tax rate needs to come down to boost investments, President, CII told CNBC TV-18 in an interview. Since both investment and consumption remain weak, the government should take measures to revive both, MD & CEO of Kotak Mahindra Bank added. The global slowdown also had an impact on the economy, even as the government invested actively in its last tenure, he further noted. Suggesting measures to tackle slowdown, the senior banker said adequate liquidity needs to be infused into the system.

The economy is undergoing a lean phase currently with Q4FY19 GDP growth rate slowing down to a 20-quarter low of 5.8 per cent. The full FY19 growth was recorded at a 5-year low of 6.8 per cent, the government data released last Friday showed. However, the government played down the weak growth numbers attributing to temporary factors. The growth will pick up from the second quarter of the current fiscal, even as the slowdown would continue in the first quarter of this fiscal, Finance Secretary Subhash Chandra Garg had said on Friday.

Also read: RBI’s June monetary policy meet begins today; these factors may shape rate cut decision

On the ongoing RBI’s June monetary policy committee (MPC) meet, the veteran banker said that rate cut would only be beneficial if the banks transmit it further. A 25 bps rate cut has also been factored in by the stock markets, he also said. The Reserve Bank of India’s Monetary Policy Committee (MPC) will announce its bi-monthly policy on Thursday.

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