The ₹1-lakh crore tax relief, announced in the Union Budget on February 1, is expected to have an immediate impact on consumption from April 1, according to Economic Affairs Secretary Ajay Seth.Speaking at a town hall organised by CNBC-TV18, Seth said, “Other measures in the budget, whether it is on a capex or on reforms or several schemes will always have a lag. But as far as consumption is concerned, the big tax relief, which is 0.3% of the GDP, (we will) get to know that from first April onwards, that is an extra money in their pocket.”Also Read: India’s leading economists analyse Budget 2025
He said while measures such as capital expenditure and reforms take time to show results, the direct tax benefits will put more disposable income in the hands of individuals right away.Seth noted that the tax relief, amounting to 0.3% of GDP, will benefit a large number of taxpayers, allowing them to allocate the extra funds for various purposes. This could include savings, purchasing consumer durables, making additional loan payments, or even upgrading to larger homes.He added that the increased disposable income may also encourage domestic tourism and other discretionary spending, providing an immediate boost to demand in the economy.Also Read: Budget 2025: IDBI divestment is on track, says DIPAM Secretary Arunish ChawlaThe government expects this direct stimulus to play a crucial role in sustaining economic momentum, as higher consumer spending can have a multiplier effect across various sectors, he added.
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