Adi Godrej said measures such as reduction in personal income tax will increase consumer spending

Industrialist Adi Godrej on Thursday said the government should introduce a stimulus package as well as lower income tax rates to boost consumption in the economy. "Such measures will increase consumers' spending capacity and improve market sentiment," Mr Godrej, chairman of the Godrej Group, told NDTV. The call for further government measures from the billionaire businessman comes at a time the economy is struggling against the lowest rate of expansion in more than six years and lakhs of job cuts due to low consumption.

"We should aim to revive GDP growth by the third or fourth quarter of the current financial year... A stimulus package is essential... There should be good GDP growth," said Mr Godrej.

India's GDP growth in April-June slid to a more than six-year low of 5 per cent, prompting the government to step in.

The government has over the past month and a half announced measures - such as withdrawal of higher taxes on foreign investors, a mega bank consolidation plan and a reduction in corporate taxes - to revive consumption and spur growth.

"There can be good growth in the festive season," added Mr Godrej, on a day state-run banks rolled out the first phase of loan camps in 250 districts across the country as part of an outreach programme to promote lending in the festival season.

Since August 23, when the government withdrew higher taxes on foreign investors as announced in Budget, the government has held talks with various sectors and brought in steps aimed at boosting consumption and investments.

Those measures include a mega bank consolidation plan which would bring down the number of public sector banks in the system to 12 from 27.

Last month, in a major boost to incentivise large companies to push investments, it reduced the corporate taxes to 22 per cent from 30 per cent, which led to a rally in the domestic equity markets.