Indian Finance Minister Nirmala Sitharaman will today present the Union Budget for 2020-2021. Since 2019, India’s economy has experienced one
Indian Finance Minister Nirmala Sitharaman will today present the Union Budget for 2020-2021.
Since 2019, India’s economy has experienced one of its slowest periods of growth in more than 40 years. The recent slowdown has surprised many—India has been one of, if not the fastest-growing developing economy in recent years. However, a dip in domestic consumption, particularly in rural areas, has dogged the economy. Along with adjustments in monetary policy, Prime Minister Narendra Modi’s government has provided income support to farmers and low-income households to stimulate consumer demand.
Sitharaman’s new plan, the second for the Modi government, is likely to encourage domestic consumption by raising income tax exemption limits. However, this may have negative effects on government tax collection if the money is not spent. It is also predicted that consumer durables and other daily use items will be brought down in price.
Expected steps include giving individual consumers more disposable income, raising the Section 80C deduction limit to allow taxpayers to broaden investments, and increasing disposable income.
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