India has repeatedly used tax cuts to boost growth, but results have been mixed. From the “Dream Budget” of 1997 to the GST cut of 2025, outcomes depended on global conditions, government spending, and domestic demand. History shows tax cuts help in the short term, but long-term effects are uncertain.

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• Tax cuts boost growth through income effect, price effect
• 1997: Dream Budget cut taxes, simplified duties, revived economy
• Wage hikes + strong revenues kept deficit under control
• 2009: Crisis-led tax cuts raised growth to 8.5% briefly
• Higher subsidies, crude prices, weak exports worsened deficit
• By 2012, inflation 10.2%, rupee fall, India tagged “fragile five”
• 2019: Corporate tax cut lowered rates to 25.17% and 17.16%
• Corporates saved, paid debt, profits up 22%, jobs only 1.5%
• Cuts improved balance sheets but failed to spark investment cycle
• 2025: GST cut impact depends on price pass-through, demand, exports