Tax reforms, elevated capex among steps to turn India into a $5-trillion economy: Finance Ministry
finance ministry on Tuesday said tax reforms, a sharp hike in capital spending “without weakening fiscal discipline” and robust public digital infrastructure are among a raft of steps initiated by the Modi government that would help India emerge as a $5-trillion economy.
In a written reply in the Rajya Sabha, minister of state for finance Pankaj Chaudhary said India is projected to become the third-largest economy in FY28 with a gross domestic product (GDP) of $5 trillion (from about $3.7 trillion in FY23), citing the International Monetary Fund’s forecast.
Taxation measures
“Direct tax measures such as the restructuring of the corporate tax rates, reduced tax litigation and removal of tax uncertainties have considerably reduced the compliance burden and resulted in high growth of revenues,” he said.
Similarly, indirect tax measures include the implementation of Goods and Services Tax (GST), which has realised the goal of the One Nation, One Tax and OneMarket, expanded formalisation of the economy and ensured a high collection of GST revenue, Chaudhary added.
The sharp hike in the government’s capital expenditure—from Rs 4.1 lakh crore in FY21 to the budgeted Rs 10 lakh crore in FY24 (BE)—has supported growth and also initiated the crowding-in of private sector investment, he said.
This was further assisted by the PM Gatishakti Scheme on infrastructure and logistics.
Capex push and other reforms
The capital expenditure has been directed towards infrastructure-intensive sectors, improving the connectivity across the country, he said.
“Besides the push to physical infrastructure, the government’s emphasis on developing public digital infrastructure during the last few years has been a game changer in enhancing the
