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Tax reduction is something that most people favor, and yet during times of economic downturn it would seem reduction of tax rate may reduce the government revenue and may be not possible to spend on health, education etc.,But this may help people to weather the economic storm. Finally it is at this time that government should be spending on public infrastructure. This will help to create more employment opportunities.

Conclusion

Many have looked to borrow billions or in some way come up with stimulus packages to try and kick-start ailing economies (including India). While these might be reasonably standard things to do, when the economy is in good times, interest rates may be hiked, borrowings may be increased and expenditure on public infrastructure may be reduced and even the taxes may be increased.

References

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* Contributed by: -
Prof. T. Srinivasa Rao has done M.Com, M.Phil. ICWAI (F)& EMBA. Also has Diploma in Export Management. He is currently working as Lecturer in Commerce at Andhra Loyola College Vijayawada, Andhra Pradesh.