Why wait for 2047 to get viksit? Let’s turbocharge India now!

Why wait for 2047 to become a Viksit Bharat when we can achieve it a decade earlier?  Why settle for a steady, sleepy, unremarkable 7-8% growth rate when we have the  potential to turbocharge it to a thriving 10%+? A recalibration of our tax system is the key  to unleashing the animal spirits of the economy, boosting consumption & investments,  and turning our aspirations into rapid, tangible growth. It’s time for action. 

The Problem: A Tax System That’s Holding Us Back 

Currently, India’s tax system feels more like a weight than a catalyst for progress.  Individuals earning above ₹5 crore face an effective tax rate of 42.74%, while businesses  are subject to corporate tax rates ranging from 25-35%, that make the system more  burdensome. 

These high taxes stifle both consumption and investment, the two main pillars of a thriving  economy. While we see steady growth, it remains well below the double-digit figures India  needs to reach its potential and achieve global competitiveness. To change this, we need  targeted reforms that provide to boost investments and incentivize spending. 

Why Cutting the Highest Tax Slabs is Crucial 

Reviving Consumption: 

India is a consumption-driven economy, with private consumption accounting for around  60% of GDP. By lowering taxes, especially for middle and higher-income groups, we can  unleash a wave of spending. More disposable income would mean more consumption— be it in retail, travel, entertainment, or essential goods—creating a multiplier effect that  accelerates growth. 

Boosting Investment Capacity: 

Lowering taxes will significantly enhance the investment capacity of both individuals and  businesses. With more cash in hand, individuals will be more inclined to invest in fixed income securities, mutual funds, or other asset classes, fostering a culture of financial  growth & also encourage individuals to invest in businesses which will further enhance  employment. Similarly, this move will empower entrepreneurs, as SMEs require capital to  set up and expand their units. Existing businesses will also benefit by being able to plough  back the money saved via reduced tax outgo into their operations & future growth. These  measures will infuse liquidity into the broader financial ecosystem, driving economic  activity and helping to pull the economy out of its current cyclical downturn.

Encouraging Compliance: 

High taxes often incentivize evasion or the use of complex loopholes. A reasonable tax  structure would encourage better compliance, broadening the tax base and ensuring that  the government collects more from a larger pool. 

Global Success Stories: 

United States: The 2017 tax reforms reduced corporate tax rates, spurred investments,  and accelerated growth. 

United Kingdom: Thatcher’s tax cuts in the 1980s rejuvenated the UK economy by  boosting entrepreneurship and investment. 

Germany: Early 2000s tax reductions helped fuel consumer spending and economic  revival. 

The Need for Double Digit Growth 

India’s goal of becoming a global economic leader can’t be achieved with 7-8% growth.  We need to set our sights higher—to 10% growth, which will generate the kind of  inclusive, job-creating economy that can lift millions out of poverty. This will result in: 

Job Creation: Thriving businesses, driven by higher consumption, will generate  employment across sectors. 

Competitiveness: Lower taxes make Indian companies more globally competitive,  attracting investments and driving innovation. 

Inclusion: Faster economic growth means a greater ability to address inequality and  improve living standards across the country. 

Revenue Neutrality: Addressing Concerns 

Critics may argue that tax cuts could lead to revenue loss, but there are ways to  counterbalance this: 

Broader Tax Base: Simplifying tax structures and improving compliance will bring more  individuals and businesses into the tax net. 

Boosted GST Revenues: More consumption will lead to higher indirect tax collections,  such as GST. 

Strategic Asset Monetization: The government can monetize unused public assets to fill  any revenue gaps. 

A Moment of Leadership: PM Modi’s Consumption-Enhancing Budgets

The BJP government, under the visionary leadership of Prime Minister Narendra Modi,  has delivered the best consumption-boosting budgets at critical moments in history. In  2017 and 2021, when India needed it the most, these budgets provided much-needed  relief to the common man and invigorated the economy. They equipped the common  citizen with more funds at their disposal, giving them the freedom to spend and invest in  their futures. These budgets were more than just fiscal tools—they were catalysts that  helped fuel optimism, uplift market sentiment, and gave a much-needed boost to  consumption. 

Now, as we face another critical juncture, we need the same unrelenting push. India  requires that same level of courage and boldness in fiscal policy. This is the moment to  enact tax reforms that leave more money in the hands of citizens, boost consumption &  investment, and bring the economy back to its full potential. We need that push now, more  than ever. 

A Decade to Viksit Bharat 

India’s destiny is waiting to be shaped, and we cannot afford to wait until 2047. With the  right reforms in place, we can accelerate our path to becoming a Viksit Bharat by 2037.  By tweaking our tax system—putting more disposable income into the hands of  consumers and businesses—we can fast-track growth, create jobs, and put India firmly  on the map as a global economic powerhouse. 

Why wait for the future when we can seize it now? Let’s embrace tax cuts, fuel consumption, and push India toward the next level. Because when India roars, the world  listens. Let’s make the leap today.