Finance Minister Sitharaman to Boost Rural Economy and Consumption in Upcoming Budget, India

Finance Minister Nirmala Sitharaman is set to address key issues related to consumption demand and the agri economy in the upcoming interim Budget on February 1. With a focus on boosting the rural economy and keeping inflation in check, Sitharaman aims to put more money in the hands of people by reducing tax burdens and increasing the standard deduction. Other proposals include increasing funds for the rural employment guarantee scheme MGNREGA and offering higher payouts for farmers. In an effort to boost consumption ahead of the general elections, additional sops may be given to women and marginalized communities. While interim Budgets typically do not include fresh tax proposals or new schemes, there is an urgency to address the current slack in consumption demand. Experts emphasize the importance of addressing rising input costs, inflation, and interest rates, especially among lower-income segments in both rural and urban areas. The agriculture sector’s growth has not met expectations, leading to a need for interventions in the interim Budget. The Budget may also explore ways to increase consumption demand, such as through amendments to the tax regime or allocation of funds for skill development programs. By addressing immediate economic challenges, the interim Budget aims to ensure that certain vulnerable sections of society do not suffer due to delayed action. The upcoming Budget is crucial in light of data revealing a deceleration in the output of consumer durables and the need to encourage migration to the new tax regime. The interim Budget’s proposals will seek parliamentary approval to meet expenses for four months of the next fiscal year.