Direct & indirect tax cuts will improve savings rate in India: Chief Economic Advisor V. Anantha Nageswaran

The direct and indirect tax cuts will improve the savings rate in India, said the Chief Economic Advisor, V. Anantha Nageswaran on Wednesday, as per an ET Now report.

He said the central government has been making efforts to support savings by generating employment.

Last month, he had said that GST 2.0 will provide a very significant boost to domestic demand. He earlier expected a 0.4-0.5% reduction in India's trend growth because of tariffs that year. With the new GST reforms in place, Nageswaran anticipates that the impact of tariffs may be lower.

Speaking at the Network18 Reforms Reloaded 2025 summit in Delhi, CEA had said that 0.4-0.5% reduction was expected from India's trend growth of 6.5% this year, and 1% reduction was likely next year. "But now due to GST reforms, the impact may be lower."

Following the new GST reforms, he has anticipated that India's FY26 GDP growth will tend towards the upper end of 6.3-6.8 percent range in FY26.

"The GST 2.0 is a very significant landmark reform. I am very confident that it will provide a very significant boost to domestic demand," Nageswaran had said. "Coming on top of the indirect taxes are the concessions and relief announced as part of the Union Budget. Taking a multiplier effect, these will quite definitely boost the GDP numbers."