Opinion
The Finance Minister has raised the tax-free income threshold to Rs 12 lakh, translating to Rs 12.75 lakh for salaried individuals after considering the standard deduction. Conspicuous change is in the strategy of government from public capex to consumption led growth. Looking back, capital expenditure almost doubled from FY-22's 5.2 Lakh Crore to FY 24's 10.18 Lakh Crore and during the course of period GDP growth was in the phenomenal rates of 9.7%, 7.8%, 8.2% and high capital expenditures especially in roads, defense, railways etc. For a sustainable economic growth it should be from private investment led growth. private investments are supported by increase in consumption demand, for a while consumption demand have been week especially urban demand. Since the cycles have to be followed it is time for consumption from capex, the fact is that 1 INR spend on Capex returns as 1.2 INR back to GDP but 1 INR spend on consumption only returns 0.9 INR back to GDP.
By tax cuts government has sacrificed 1 Lakh Crore and this amount will come into savings, investments and more on discretionary spending than pushing up of consumer staples. Consumer discretionary includes goods and services like jewelry, hotels, scooters, cars, white goods, credit card companies and finance companies.
Student at St Berchmans college changanachery
4 周And the income tax relaxation is given to those who have a bare minimum salary of 1 lakh per month.And these people might not be reluctant to spend in the current time too as they are categorised as high income group.Bsically what I'm trying to say is that of government want to boost more consumption they should focus more on lower middle class , those who doesn't have enough income to run their day to day needs and those people actually constitute a major part of Indian population