New Delhi: This year’s Economic Survey has suggested a cut in tax rates to reverse the decline in growth caused by demonetisation. Presented in Parliament on Tuesday, the document for 2016-17 said growth in the current fiscal was likely to decelerate to 6.5% from the earlier projection of 7.1%.

Policy support in the Budget, scheduled for Wednesday, could help the growth return to between 6.75% and 7.5% in 2017-18, it noted. Comparing demonetisation to a stick, the Survey said the government should use GST, lower taxes and better tax implementation as carrots to complement it.

“The follow-up actions to minimise the costs and maximise the benefits include fast, demand-driven remonetisation, (and) further tax reforms,” the Survey, presented in Parliament by Finance Minister Arun Jaitley, said.

The Survey recommends bringing land and real estate under GST. It also advocates a reduction in stamp duties and corporate tax, and says the government must allay “anxieties about over-zealous tax administration.” The government should think of universal basic income (UBI), the survey says, describing it as the “fastest way to reduce poverty.”

For 2017-18, the survey strikes a note of caution on inflation that could be caused by higher crude prices. “Oil price rise to $60-65 per barrel could lead to reduction in consumption in India, less room for public investment and lower corporate margins, thereby further denting private investment,” it warned.