With the Union Budget for FY 23 round the corner, expectations are high in terms of it giving further boost to job-led growth for our economy, considering the terrible times induced by Covid-related restrictions in the job market.
This is especially true of contact based sectors such as hospitality and restaurants, as it is estimated that around 30% of restaurants have shut permanently since the first lockdown two years ago, and significant number of star-rated hotels are in dire states, and are battling for survival. The potential of these sectors to generate both direct and indirect employment is only too well known.
The severe restrictions last year and this month would have certainly taken its toll on other small businesses as well.
Such extra-ordinary circumstances call for some out-of-the-box thinking.
Thus, besides speeding up the GST and tax reimbursements to such sectors besides others, how about giving an option of a special one-year waiver for all government levies such as fees on all licenses, property taxes etc for such sectors? Those establishments which wish to avail of the same, would need to repay the dues in three equal instalments from FY 24 onwards, and those which do not wish to avail of the same should be entitled to a special rebate of X% on all such levies.
Yes, the respective state governments would need to be compensated by the Central government for forgoing such dues, which would certainly widen the overall fiscal deficit for FY 23. But at the same time, such a move would result in a multiplier effect in the economy in terms of boosting employment, thereby triggering a boost to the aggregate demand, which in turn would yield benefits in terms of higher GST revenues.
The international rating agencies would certainly see long-term merit in such an innovative move, under such extra-ordinary circumstances.
No doubt, there could be other 'n' number such out-of-the-box ideas, to address the challenges confronting our economy.
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