CHALLENGES BEFORE THE LAND SLIDE ELECTION WIN (JAPAN'S TAKAICHI'S GOVT.) CONSIDERED ALTERNATIVES SUCH AS NON -TAX REVENUES AND CUTS TO EXISTING SUBSIDIES.

Japanese Prime Minister Sanae Takaicchi renewed a pledge on Monday to cut a sales tax on food, after a historic election win brightened chances for stimulus measures that have rattled financial markets. Takaichi's ruling liberal democratic Party (LDP) romped to victory in Sundays poll, helped by a pledge to ease household living costs by suspending for two years the tax of 8% on food, a move she has called a "long cherished dream".She told a news conference, promising, the earliest date possible, for the tax suspension, while ruling out fresh debt issuance to achieve it, and we must pull Japan out of excessively tight fiscal policy and a lack of investment. Earlier, investors wary of uncertainty about how Japan, labouring under the developed world's highest debt burden, would fund the proposal Some analyst had suggested that Takaicchi's strong mandate might give her leeway to retreat from the plan with heavy defeats at the ballot box handed to the opposition parties calling for even bolder tax cuts. She said cross party debates on social welfare and taxation would help thrash out a timetable and ways to fund the suspension, as the government considered alternatives such as non -tax revenues and cuts to existing subsidies. The government would overhaul it's approach to planning the budget, so as to smooth long term funding for corporate investment in growth area . Takaichi's challenge is to find revenue to offset the tax suspension, which would cost about five trillion yen a year or roughly Japan's entire budget for the education. A sharp rise in government bond yields would increase the cost of servicing public debt that is roughly twice the size of Japan's economy. Worries over fiscal sustainability could also trigger further yen weakness, inflating import prices and broader inflammation, which would dilute benefits to households from the tax cuts. She may have won the public's mandate but not yet that of the markets, as per the senior fellow at Pictet Asset Management Japan, if concern over worsening finances causes unintended yen falls, that could push up food prices via higher import costs and this may hurt her popularity. As such there is no mechanism to for corporate investment, even smooth long funding by way of financial markets:-- Er Fateh chand Guleria, Director RTI welfare Association registered number HPCD, 3552 , Bilaspur Himachal Pradesh phone number, 9459334377