Cut Personal Tax to Increase Consumption Demand!

• No sooner the lockdown was announced way back in March, the Union Government was quickly off the block in announcing comprehensive stimulus packages primarily aimed at the millions and millions of poor working-class anticipating the hardships the measure would entail across the country. Migrant laborers too were covered in the package as ration was freely made available wherever they were staying at that time.

PC: Quartz

• Unfortunately, whatever transpired aftermath of the lockdown was not to the liking of millions of laborers who were greatly distraught by the turn of events and that led to a mass movement by walk, roads or any available means of transportation. The sight of laborers and their families walking along the roads was not pretty at all. In fact, the jury is still out as to whether any alternative measures could have been thought about those suffering laborers before imposing lockdowns.
• Subsequently, the Government did come out with more elaborate financial packages covering all affected individuals’ and sectors, none could have claimed to be unaffected though, to not only provide much-needed succor but also propel them to tread the path of self-sustenance. In a nutshell, measures were well thought out to ensure individuals and businesses are accorded enough financial support to kick-start stalled economic activities on a promising note.

PC: tomorrow makers

• Expectedly, the opposition – as is its won’t- slammed the Government’s financial packages, grandly and elaborately announced as 10 % of the GDP, as mere pronouncements lacking in actual accrual to the intended beneficiaries. I am of the firm view that the Finance Minister has indeed succeeded in reaching out to the entire gamut of economic sectors complementing in letter and in spirit Atma Nirbharta as propagated by the Prime Minister.
• However, I also firmly believe that the personal income tax too should be cut forthwith and without any further delay because the increased purchasing power of the wide spectrum of the middle class will have a cascading effect in driving the consumer demand upwards. Make no mistake, relatively affluent households are bound to drive consumer demand for durables, investment in property, education, health, entertainment and recreation services etc.

PC: ADP

• On the other hand, improvement in the purchasing power of the poor through welcome will only help in raising the demand for most food and clothing rather than consumer durables. Middle class will no doubt spruce up the demand and ensure the supply chain gains robustness if they get relief on direct and indirect taxes on their consumptions thereby leading the way to help grow the stuttering GDP a notch higher. Authorities concerned to kindly take note and deliberate for all its worth.