Ninan on what is likely in India — tax and spend. “With economic disruption, growing inequality, & lack of government resources, economic practice is coming full circle…Higher tax rates, central banks pumping out cash, protection for home industry, suppressing interest rates, increased social welfare pay-outs — it all harks back to pre-Thatcher-Reagan. Sure, taxes will not go back to the 70-90 per cent range that existed once in Britain and the US (as in India), and governments still believe in market orientation when it comes to products and services. But they are re-assuming the primary role in building physical infrastructure and funding research.”
Sunil Jain in Financial Express: “The government should use this opportunity to raise corporation tax rates; companies are doing exceptionally well and can afford to pay a higher tax rate for a couple of years. A 30% tax rate won’t kill them. These are extraordinary times and call for special measures. The rates can be reversed after two years. Meanwhile, the additional revenue can be used to bring some succour to MSMEs and also the less privileged; MGNREGA allocations can be increased and more cash transfers can be made.”
According to me, India needs exactly the opposite: this is the time to implement the ideas in the Mission 10-20-30 blog series I wrote a year ago.