Budget for Consumption Stimulus

The Union Budget presented by the Finance Minister Nirmala Sitharaman has tried to address the market uncertainty that has engulfed international trade. Prices are soaring high and the purchase capacity has been hit to the worst extent. The public debt has reached new levels. The major cause cited by the economists is the hidden effect of the post pandemic issues. The Finance Minister has tried to strike the correct note by identifying the macroeconomic changes but she has tried to address the factors of economic slowdown. There has been a significant slump in the consumption due to non-availability of the disposable income among the consumers.This has been addressed by indulging in the income tax relief besides the focus on the urban issues.It depends on carrying on the momentum to ensure the generation of wealth among the middle class with a hope of generating a demand in the market for the rise in consumption.It can invite the investments in the market and catalyse the growth.After all it is the great Indian middle class that stimulates the consumption and vote swing as well.The Central government has tried to address the middle class keeping in view the long terms importance of this section in terms of market stability and the impact of this section on the electoral politics. That is a good move to ensure the stability.It can change the market dynamics.Government has tried to tread a different economic path than it had implemented during and after the pandemic.The capex has been emerging as the major area of concern in the budgets if we will analyse the successive budgets, especially the public sector. Finance Minister has decided to address the household demand so that the growth is stimulated from the common man’s kitchen.The budget has put its bet on the basics to revive the economy.Implementation of the 8th pay commission is on the cards and such this budget can have different meaning for different people.As the middle class terms it a smart move to encourage the consumption in the market to generate demand and at the same time the government is broadening the tax bracket. Fiscal transparency and the policies for the spending by the current regime have been its achievements.This can be seen in the tone and tenor of the budget.Whatever may be policy formulations to engage the middle class in the demand and consumption but one thing has to be internalised that the long terms economic stability addresses the fiscal deficit. The budget has shown the glimmer of hope to address that. The debt in proportion to the GDP has been used to focus on this issue. There is hope to achieve this stability by 2031.But the short term stability requires the control of fiscal deficit and market borrowing. One cannot deny that after all the budget has to address the politics of economics that shapes the voter mindset on ground zero.This budget has sent many signals. Bihar will be going to elections this year.Income tax slab enlargement will have an impact on the voters in Delhi.As the urban disenchantment is quite visible.This can have an impact on the votes. Politics of economics and hence the Indian political economy demands that the middle class has to keep in good humour. As it cannot be taken for a ride for too long.The silent Indian middle class can invert the political balance that has been witnessed continuously by the nation in many decisive Lok Sabha elections and assembly Elections.