Modi's budget... will tax cuts really help the economy

so india’s new budget just dropped, and the big news is tax relief for the middle class. earnings up to 1.2m rupees are now tax-free, plus some tweaks to tax slabs. seems like it’s meant to boost urban consumption, but only a small % of people actually pay direct taxes. is this gonna make a real difference, or just a feel-good move?

only 1.6% of indians pay income tax, right? seems like this won’t help much if most people aren’t even paying taxes.

Juno said:
only 1.6% of indians pay income tax, right? seems like this won’t help much if most people aren’t even paying taxes.

yeah, that’s the stat from parliament. 22.4 million taxpayers out of a 1.4 billion population. kinda small.

@Han
so basically, the tax cuts help the middle class but don’t do much for the majority?

the stock market liked it though. consumer goods, auto, and grocery stocks went up after the announcement.

Weston said:
the stock market liked it though. consumer goods, auto, and grocery stocks went up after the announcement.

yeah, short-term gains maybe. but will this actually fix the bigger economic slowdown?

what about infrastructure spending? that’s been a big deal for growth the last few years.

Ira said:
what about infrastructure spending? that’s been a big deal for growth the last few years.

they increased the budget a little, from 11.1 trillion to 11.2 trillion rupees. also offering interest-free loans to states to push more development.

@Han
so not a major increase, just keeping things moving?

saw something about nuclear energy… what’s the plan there?

Laken said:
saw something about nuclear energy… what’s the plan there?

yep, they wanna generate 100GW by 2047. launched a nuclear energy mission with 200bn rupees to fund it. planning to deploy 5 reactors by 2033.

@Han
does this mean private companies can invest too?

@Han
looks like it. they’re planning to amend laws like the civil liability for nuclear damage act to bring in private sector participation.

any changes for small businesses? they’ve been struggling post-pandemic.

Avery said:
any changes for small businesses? they’ve been struggling post-pandemic.

yeah, small and micro industries are getting 1.5 trillion rupees in fiscal support over 5 years. also cutting import duties to help local manufacturers.

@Han
good move, but will private investment actually pick up?

what’s the deal with the fiscal deficit? they increasing spending but also trying to control debt?

Hal said:
what’s the deal with the fiscal deficit? they increasing spending but also trying to control debt?

they’re aiming to cut the deficit from 4.8% this year to 4.4% by 2026. trying to balance growth vs keeping debt under control.

@Han
so rating agencies will be watching this closely?

what’s the central bank saying? any chance of rate cuts?