I-T, GST relief boosts supply too: CEA

CHIEF ECONOMIC ADVISER (CEA) V Anantha Nageswaran said on Friday that income-tax relief and goods and services tax (GST) rate cuts are“not just for boosting demand but also supplies”, expressing confidence that economic growth would be upwards of 6.8% in the current financial year.

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He added that the fiscal measures taken by the central government recently were designed to strengthen both demand and supply.

“What was done in direct taxes in February and indirect taxes in September, they are not about a demand boost. They are also very much about a supply boost,” he said at CNBC-TV18's Global Leadership Summit. “The most important indicator is not interest rates; it is demand visibility.”

The Index of Industrial Production (IIP) data for September had shown sharp year-on-year increases in the production of assorted manufactured goods, especially automobiles and consumer durables. This was a clear sign of a prompt supply response to festive demand, boosted by GST cuts on key items.