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Can GOI kickstart Consumerism

Lowering the Goods and Services Tax, or GST, and increasing income tax slab rates are two policy moves that can energise consumer spending in India. Here is how these steps could work in favour of a stronger domestic market.

Reducing GST directly brings down the prices of a wide range of goods and services. Lower price tags make everyday items more affordable for families and individuals. This encourages people to spend more, satisfying needs and wants they might have postponed due to higher costs. When people purchase more, businesses get more orders, leading to higher production and potentially more jobs. Sectors like electronics, cars, and home appliances can see quicker recovery with lower GST, as buyers become less hesitant to make big-ticket purchases.

Raising income tax slabs allows individuals to keep more of their earnings. When people pay less tax on their income, their disposable income goes up. More disposable income means greater freedom to spend on products, travel, dining, and entertainment. This can help families improve their standard of living and give young professionals confidence to invest in themselves and their homes.

When both reforms happen together, they create a strong push for consumer activity. Cheaper products and higher incomes mean that people are more likely to buy what they want. This increases sales across sectors, boosts company profits, and encourages new entrepreneurs to enter the market. The rise in spending can lead to more tax collection over time as businesses grow and more jobs are created.

Although there may be a short-term dip in government revenue, a surge in consumer spending and economic activity can compensate for it. These reforms can set the stage for sustained growth and a vibrant marketplace in India.

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