India Eyes Easing Quarterly Spending Restrictions Amid Economic Slowdown

New Delhi, Dec 12: In a bid to meet its capital expenditure target for the fiscal year 2024/2025, the Indian government is considering easing quarterly spending restrictions, amid concerns over a slowdown in economic indicators. The move comes as slower spending in the first half of the year has contributed to a decline in economic growth.

Sources close to the finance ministry have revealed that the government is exploring options to increase spending and revive flagging economic activities, which had been impacted by the recent slowdown. However, officials emphasize that the potential relaxation of spending limits may not impact the overall borrowing plan for the year.

On a positive note, the Goods and Services Tax (GST) Council is likely to consider lowering tax rates on certain insurance plans, including potentially eliminating the 18% GST on term life insurance. The council has also proposed eliminating the GST on health insurance for senior citizens and those with coverage up to Rs 5 lakh. Nonetheless, broader GST changes are being held back due to concerns from some states over potential revenue losses.

The measures outlined by the government aim to stimulate economic growth and inject new life into flagging industries. As the country strives to meet its budget targets, policymakers will be closely watching developments on the spending front.