Niti Aayog pegs India's growth to touch 8% in 2-3 years
New Delhi, Apr 28: The NITI Aayog expects India's growth rate to return to the 8 per cent plus trajectory in 2-3 years, paving the way for a faster reduction in poverty during the next decade.
In its 3-year draft action agenda, it has also stressed upon the need for reforms in taxation, agriculture and governance for accelerating all-round development of the country.
"Indeed, there are good prospects that we will return to 8 per cent plus growth trajectory in another 2-3 years if not sooner. Therefore, the chances of massive cut in the poverty rate in the upcoming decade are excellent," said the 208-page agenda circulated among the chief ministers on Sunday.
The action agenda will replace the five-year planning system. The 12th Five Year Plan, the last of the series, ended on March 31. On taxation reforms, the Aayog has proposed doing away with corporate tax exemptions and bringing down the tax rate from 34 per cent to 25 per cent (including surcharges and cesses) for all companies.
Finance Minister Arun Jaitley has already announced plans to cut corporate tax rate to 25 per cent in a phased manner. The Aayog further said the income tax exemption threshold should remain unchanged for the inclusion of greater proposition of individuals in the tax net over time.
"However, the tax slabs corresponding to the lowest tax rate should be expanded to ensure that the tax liability of lower income individuals does not increase suddenly with the growth in their nominal income," the draft agenda said.
In the Union Budget 2017-18, the income tax rate on income between Rs 2.5 lakh and Rs 5 lakh was lowered to 5 per cent from 10 per cent. Referring to the customs duty, the agenda makes a case for a uniform customs duty of 7 per cent to do away with the problem of inverted duty structure, one of the grudges of the domestic industry.
With regard to farm income, it said the government should plug the loopholes to stop misuse by non-agriculture entities to evade taxes by declaring agriculture as a source of their income. On doubling farmers' incomes by 2022, the paper has suggested a reform in the Agricultural Produce Marketing (APMC Act) to ensure that farmers receive remunerative prices.
It further said productivity should be raised through enhanced irrigation, faster seed replacement and precision agriculture. On the governance front, the draft pitched for recalibrating the role of the government by shrinking its involvement in activities that 'do not serve a public purpose' and expanding its role in areas that necessarily require public provision.
Further, the action agenda also emphasised on strengthening the civil services through better human resource management, e-governance, addressing anomalies in tenures of secretaries and increasing specialisation and lateral entry.