Image: Mansi Thapliyal/Reuters
In her Budget speech on Saturday, Finance Minister Nirmala Sitharaman did not spell out measures to drive retail consumption. In fact, experts expressed surprise that there was nothing to boost rural consumption either. The only initiative to push consumption is the slashing of income tax rates.
There were expectations that the minister would address the issue in view of the slowing economy. However, she did not announce any quick-fixes for the economy in her address that lasted for more than 2.5 hours.
The PM Kusum Yojana, PM Fasal Bima Yojana along with the proposal to have five new smart cities might lead to an increase in consumer demand, but increased taxes on cigarette by 11 percent will have an adverse impact on the same. The basic customs duty has also increased on oil, butter and cheese, molasses, preserved potatoes and wine which would have a negative impact on consumption.
Taxpayers now have the option to pay taxes under the old or new tax regime. Gautam Duggad, head of research, institutional equities at Motilal Oswal Financial Services Ltd, says, “Not all people will shift to the new tax regime. It’s neither a reason to get dejected nor to celebrate.”