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Can govt squeeze in a tax stimulus to quell Covid-induced economic crisis?

Falling direct and indirect tax revenues give it little elbow room to do so, even as industry clamours for relief

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Lower tax collection could affect the government’s fiscal glide path

Indivjal Dhasmana New Delhi
Keynesian economics had prescribed an increase in  expenditures and cutting of taxes to pull the economies out of the great depression. Many economists offer the same formula to fight the economic slowdown exacerbated by the Covid-19-induced lockdown.

During the time of depression of the late 1920s and 1930s, British economist John Maynard Keynes argued that even small direct interventions by the Government to perk up demand can have a disproportionately high impact on economic growth due to the multiplier effect.

While the government has already announced a package of Rs 1.71 trillion targeted at vulnerable sections of the society, does
Topics : Coronavirus

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First Published: Apr 29 2020 | 3:12 PM IST

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