The government classifies more than 300 million of India’s population among the middle class (Archive)
New Delhi:
The BJP has urged the government to put more money in the pockets of middle-income families in the next budget and cut raw material costs for small and medium-sized businesses, a party spokesman said on Thursday.
After the impact of the coronavirus shrunk the economy in the past two quarters, Prime Minister Narendra Modi’s government wants to boost spending on highway, port and pipeline projects in the next fiscal year to revive businesses and create jobs.
Prime Minister Modi’s Bharatiya Janata Party (BJP) believes that while the poor received free rations and businesses got state-guaranteed loans and other concessions, the economy will benefit from reducing the middle-class tax bill with more generous standard deductions. .
“The middle-income group is feeling a lot of trouble and they need some support,” said Gopal Krishna Agarwal, who handles communication and coordination for the BJP on economic matters.
“Encouraging consumption would also help the industry,” Agarwal told Reuters, days after meeting with the finance minister to discuss budget suggestions from party members.
“I can say that the budget will take care of the middle class.”
The government classifies more than 300 million of India’s population of 1.35 billion among middle-class consumers.
Finance Ministry spokesman Rajesh Malhotra said no ministry official would comment on the budget for the new fiscal year, which begins in April, until the document is unveiled in parliament on February 1.
Another proposal is to increase depreciation allowances on items such as cars, plant machinery and consumer durables such as refrigerators to increase consumption and lower tax expenditures for companies, Agarwal added.
For small and medium-sized companies, the government could also seek to reduce import tariffs on some raw materials such as copper and base metals.
“Raw material costs are increasing not because of demand, but because of supply constraints for consuming industries, and they are asking for some relief,” Agarwal said.
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