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New govt can start by cutting corporate tax to 25% and removing exemptions, says Arvind Panagariya

Updated : May 29, 2019 01:09 PM IST

The new government can start by cutting corporate tax to 25 percent and removing exemptions, said eminent economist Arvind Panagariya on Monday.

In an interview with CNBC-TV18, Panagariya, who had served as the first Vice Chairman of the NITI Aayog from January 2015 to August 2017, said, "This is an item on my first 100-day list... what I will suggest is when the final Budget for 2019-2020 is presented, do a clean reform there, bring the rate down to 25 percent and eliminate all the exemptions. That would be a good start and let us take it from there."

After a historic mandate, the Modi government's focus will now shift on ushering in reforms and the next 100 days are expected to be action packed on the policy front.

Speaking about the export sector, Panagariya said, "On the trade front we did not make as much progress. I would go a step further and say perhaps we receded a bit. Several of the tariffs got raised in the last two years and that I think is not a good sign."

On the agriculture sector, he said, "I have come to the view that at least in the medium to longer term, incentivising private investment into agriculture and boosting agriculture exports are important to bring relief to the farmers in the short run. However, in the long run, we will not solve the problems of agriculture within agriculture. We have to solve that outside of agriculture which is industry and services."
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