The government seeing the crisis the economy of our country is confronting is likely considering announcement of a bail out package to revive it. GST and demonetisation are largely being held responsible to affect the GDP levels which for the quarter ended June registered 3- year lows at 5.7%.
The news channel reported that the stimulus can be announced in the next Union Budget slated for presentation on February 1 in the parliament. The stimulus package may comprise big ticket finance for public sector projects after the private capital expenditure has seen to come at a halt and stopped altogether India's growth story.
Also, reports are there that revenue collection dropped after the implementation of GST shall see reduction in government spending. At the same time, wider transitional credit cto the tunes of Rs. 65000 crore of the Rs. 95000 crore collected, being claimed by taxpayers is likely to hurt the country's financial system. The GST law allows tax credit for taxes paid on input in the previous tax regime for upto a maximum period of six months from the date of GST implementation i.e., July 1, 2017.
For the quarter ended June, country's CAD also extended by 2.4% of GDP to USD 14.3 billion.