Gowda, a US-educated lawmaker from Bengaluru told ET that this is the worst time to raise the rates of GST on essential commodities. This will further squeeze the spending power of large sections of people. Any intervention from the government’s side should aim at increasing consumption, Gowda, who held portfolios of Agriculture and Rural Development during the Congress and during the JD(S)-Congress coalition regimes, said. “If you look at the data, there is a visible reduction in spending among the low-income group because they are cutting back on their essential needs. The government would do well to ensure there is more money available in their hands, who will use it to purchase essential commodities. Every rupee spent will have a multiplier effect of five to six rupees. This will help economy wriggle out of the downspin,” the former Minister said. “The purpose of cuts in corporate tax rates are to make rich happy and probably buy their silence about the state of the economy, and boost stock markets. Many economists have said this is unlikely to improve the economy,” Gowda said.
