The government noticed angst and economic slowdown, so it decided to reduce the income tax burden to boost growth and consumer confidence.
₹1 lakh crore will be forfeit to make incomes up to ₹12 lakh tax-free and adjust tax slabs, offering more disposable income to people.
The goal is to stimulate the economy by boosting demand, savings, and investments. This, in turn, can help revive economic growth.
Consumption boosts demand, savings help banks and credit flows, and investments strengthen long-term growth.
Giving people more money lets them decide how to spend, save, or invest. This could benefit various sectors beyond just industries like steel and cement.
The policy also encourages higher savings, which can support MSMEs and other sectors requiring credit. Additionally, household investments in areas like housing are common.
Despite increased spending, the budget remains non-inflationary, with a controlled fiscal deficit of 4.4% of GDP.
Public capital expenditure is substantial, totaling about ₹20 lakh crore.
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