INDUSTRY chamber Assocham on Wednesday urged the Government to reduce GST rate by 25 per cent across the board for the next six months with a view to boost investment and demand. The industry body said that it is not the time to worry about widening fiscal deficit as in the current circumstances, deficit financing will not be in an issue. “The first radical suggestion is that GST rate should be cut across all slabs by 25 per cent for the next six months in order to kick start the economy.

 

It will mean an additional deficit of Rs 1.20 lakh crore, which obviously will increase fiscal deficit. But in the circumstances of today, deficit financing will not be an issue,” Assocham President Niranjan Hiranandani told reporters here. He said that the move will encourage more businesses to pay tax, which will lead to generate more revenue due to expansion of the tax base. Such steps would help in achieving the target of USD 5 trillion GDP, he added.