How can India’s consumption growth be revived?
6 hours, 6 minutes ago

How can India’s consumption growth be revived?

Live Mint  

Weakness in private consumption is at the forefront of India’s growth slowdown. Personal income taxes, combined with net indirect taxes, now exceed 20% of private consumption spending, the highest level on record. A personal income tax cut would benefit only a small fraction of the population, as the vast majority do not pay income tax. Aggregate direct tax collections have slowed unexpectedly, and reversing an income tax cut later, if needed for the sake of fiscal health, will be politically difficult. The savings from a personal income tax cut are also unlikely to translate one-for-one into increased consumption.

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History of this topic

Mint Primer: Why consumer demand needs a quick revival
6 days, 6 hours ago

Mint Primer: Why consumer demand needs a quick revival

Live Mint  

In the second quarter of the current fiscal, manufacturing growth slowed to just 2.2% from 7% in the first quarter. This pulled down industry’s contribution to the gross domestic product growth significantly, causing overall economic growth to tank. In the second quarter, India’s GDP growth fell sharply to 5.4% as against 8.1% registered in the same period a year ago. …

DC Edit | Fall in consumption signals economic slump lies ahead
6 days, 11 hours ago

DC Edit | Fall in consumption signals economic slump lies ahead

Deccan Chronicle  

The Indian economy is likely to record the slowest growth in the last four years at 6.4 per cent in the next financial year 2024-25, according to the first advance estimates released by the government on Tuesday. The growth in the manufacturing sector, constrained by weak exports and slowing global demand, is expected to muted at 5.3 per cent from …

‘Rate cut not a silver bullet for growth revival’
6 days, 13 hours ago

‘Rate cut not a silver bullet for growth revival’

The Hindu  

There is no single silver bullet such as an interest rate cut that can address the economy’s slowdown, and the upcoming Union Budget must revive India’s slowing consumption impulses through multiple measures, including a cut in income taxes and fuel duties, and provide a reforms roadmap to bring growth back to the 7% level, India’s apex industry body’s head said. …

Why the budget must bring income tax relief this time around
1 week ago

Why the budget must bring income tax relief this time around

New Indian Express  

It's often argued that tax cuts can stimulate the economy. If so, given India's weakening urban consumption, the question is whether the government should consider cutting personal income taxes in the forthcoming Union budget or reduce rates that affect everyone like the GST. Just about 10%-15% of the population pay individual income taxes and so a reduction in income tax …

India’s household consumption survey doesn’t feed public policy all that well
1 week, 6 days ago

India’s household consumption survey doesn’t feed public policy all that well

Live Mint  

India’s government recently released the findings of its 2023-24 survey of household consumption expenditure and expressed satisfaction at the seeming narrowing of spending gaps in society at large and between rural and urban populations. However, we must not set too much store by the monthly per capita consumption expenditure figures of this sample survey. India’s free foodgrain scheme may explain …

Budget 2025: Should Nirmala Sitharaman focus on boosting consumption?
2 weeks ago

Budget 2025: Should Nirmala Sitharaman focus on boosting consumption?

India Today  

Union Finance Minister Nirmala Sitharaman faces a challenging economic backdrop as she prepares to present Budget 2025-26 on February 1. The Reserve Bank of India also lowered its real GDP growth forecast for 2024-25 to 6.6%, citing global uncertainties, volatile commodity prices, and fragmented economic conditions. MIDDLE-CLASS RELIEF & CONSUMPTION REVIVAL Anand Ramanathan, Partner and Leader for the Consumer Products …

India Inc discusses high tax, inflation, job avenues with finance minister Nirmala Sitharaman
2 weeks, 1 day ago

India Inc discusses high tax, inflation, job avenues with finance minister Nirmala Sitharaman

Deccan Chronicle  

New Delhi: Amid slowing the consumption demand in both rural and urban areas in the country, India Inc on Monday met finance minister and discussed various issues related to the common man, including the burden of high tax for middleclass, inflation, job opportunities among others. Besides, the industry representatives also flagged concerns over an issue of dumping of excess stock …

Indian economy to grow at 6.5-6.8 pc in FY25 on higher domestic consumption: Deloitte
2 weeks, 3 days ago

Indian economy to grow at 6.5-6.8 pc in FY25 on higher domestic consumption: Deloitte

Live Mint  

New Delhi, Dec 29 Indian economy is likely to grow at 6.5-6.8 per cent this fiscal and slightly higher between 6.7-7.3 per cent in FY2026, boosted by domestic consumption, Deloitte said on Sunday. Deloitte India Economist Rumki Majumdar said the growth in the first half of the fiscal year 2025 turned out to be slower than estimated as election uncertainties …

How big corporates are choking middle class, hurting India growth story
4 weeks, 1 day ago

How big corporates are choking middle class, hurting India growth story

India Today  

Industrialists and corporates played a big role in building the India Story and shaping its emerging economy. "India grew at 5.4% in the July-September quarter and the consumption component has been seeing lower growth in the last four-five quarters," political analyst and commentator Amitabh Tiwari tells India Today Digital. Salary hike: average wages across six sectors Sector 2019 2020 2021 …

India’s GDP growth shocker: Bad news can be good too
1 month, 1 week ago

India’s GDP growth shocker: Bad news can be good too

Live Mint  

India’s growth in gross domestic product of 5.4% in the three months ended 30 September, or the second quarter of 2024-25, was a shocker. It’s the lowest level seen since the third quarter of 2022-23 and a sharp drop from 8.1% growth in the same period last year and also from 6.7% in the first quarter of 2024-25. Given the …

'Double engine' of private investment, mass consumption derailed under Modi government: Congress
2 months ago

'Double engine' of private investment, mass consumption derailed under Modi government: Congress

New Indian Express  

Congress general secretary in-charge communications Jairam Ramesh urged the government to accept what the Congress has been proposing - raising MGNREGA wages to a minimum of Rs.400 per day, guaranteeing MSP and a loan waiver for farmers, and a monthly income support scheme for women - to kickstart income growth in rural India. Last week, several CEOs from India Inc …

How weak consumption growth is holding back the Indian economy's potential
5 months, 2 weeks ago

How weak consumption growth is holding back the Indian economy's potential

Hindustan Times  

Ashlesh —34-year-old former data entry operator at a small firm in Ghaziabad, and originally from the village of Ambar Nagar in Balrampur, in Uttar Pradesh — immediately wanted to make it big in life the day after he had lost his job. ‘As if there is no effect of the high growth here,” Ashlesh said, echoing concerns shared by Amit …

Rural-Urban Consumption Dynamics in India
7 months ago

Rural-Urban Consumption Dynamics in India

Deccan Chronicle  

Over the past decade, India has witnessed a notable rise in consumption spending in both rural and urban areas, indicating a shift in economic dynamics and lifestyle choices. Furthermore, the changing food habits of the Indian populace have contributed to the evolving consumption patterns observed in both rural and urban areas. In conclusion, the equivalent rise in consumption spending in …

Real GDP growth may hit 8% this fiscal year, signals FinMin
9 months, 3 weeks ago

Real GDP growth may hit 8% this fiscal year, signals FinMin

The Hindu  

India’s economy may well end up growing by about 8% this fiscal, outstripping the 7.6% real GDP growth projected by the National Statistical Office, the Finance Ministry signalled on Friday, citing the continuing momentum in economic activity in the ongoing final quarter of 2023-24. Despite risks such as “hardening crude oil prices” and “global supply chain bottlenecks to trade”, the …

Two sides to India’s consumption story
11 months ago

Two sides to India’s consumption story

New Indian Express  

India’s so-called K-shaped economic growth has a new name – premiumisation. Earlier this year, the government released the first advance estimates of GDP growth in FY24 showing consumption growth at 4.4 percent -- the lowest in 20 years. The government’s efforts to promote local manufacturing by levying high taxes on imported goods have also resulted in higher prices for many …

Positive GDP Surprise: Growth in Private Consumption Remains Critical
1 year ago

Positive GDP Surprise: Growth in Private Consumption Remains Critical

News 18  

The government’s first advance estimate of the Gross Domestic Product for the current fiscal, which will end in March, has been a positive surprise for most economists. Rajani Sinha, the Chief Economist of CARE Ratings, said MOSPI’s projection of the GDP “seems to be relatively optimistic, surpassing the RBI’s estimate of 7% and our own projection of 6.8 per cent”. …

Boosting consumption seen as key to reviving economy
1 year, 4 months ago

Boosting consumption seen as key to reviving economy

China Daily  

Consumers browse Huawei phones at an outlet in Yantai, Shandong province, in August. Experts call for more efforts to facilitate recovery in purchasing enthusiasm Reviving consumer demand and bolstering consumer confidence will be key priorities for China's economy for the rest of the year, as the country seeks to drive a consumption-led recovery amid downward pressures, economists said. A recovery …

Average household spending rose 3.5% from August 2023 to July 2024, shows govt. survey
1 year, 5 months ago

Average household spending rose 3.5% from August 2023 to July 2024, shows govt. survey

The Hindu  

India’s average household consumption spending on a per capita basis rose about 3.5% in real terms through August 2023 to July 2024 from a year ago, as per the Household Consumption Expenditure Survey, and the Centre asserted this signals a decline in consumption inequality as well as a narrowing gap between urban and rural spends. In real terms, the average …

ADB pares India’s growth hopes to 6.4%
1 year, 9 months ago

ADB pares India’s growth hopes to 6.4%

The Hindu  

The Asian Development Bank has slashed its growth projection for India for 2023-24 sharply from 7.2% estimated earlier to 6.4%, attributing the cut to the global economic slowdown, tight monetary conditions, and persistently elevated oil prices. While domestic consumption demand is likely to stay healthy, private investment growth is likely to be lower this year due to high lending rates …

India on Cusp of Returning to High Growth Trajectory, Will Become World’s Third Largest Economy by 2027-28: Economist
1 year, 11 months ago

India on Cusp of Returning to High Growth Trajectory, Will Become World’s Third Largest Economy by 2027-28: Economist

News 18  

Eminent economist Arvind Panagariya has said India is on the cusp of returning to a high growth trajectory and voiced confidence that the country will become the world’s third-largest economy by 2027-28. A day before Finance Minister Nirmala Sitharaman presented the Union Budget on Wednesday, the Economic Survey tabled in Parliament pegged India’s GDP growth at 6.5 per cent in …

Income tax cuts, factory perks: What to watch for in Budget 2023
1 year, 11 months ago

Income tax cuts, factory perks: What to watch for in Budget 2023

Live Mint  

India’s budget on Wednesday will test the government’s resolve to stay fiscally prudent as expectations of lower taxes, wider social security net and further boost to production gather steam before national elections. Finance Minister Nirmala Sitharaman may tweak income-tax slabs to provide relief to the nation’s vast middle class and increase spend on the poor through programs such as rural …

Budget 2023: Why govt should consider tax relief despite limited fiscal room
1 year, 11 months ago

Budget 2023: Why govt should consider tax relief despite limited fiscal room

India Today  

An incremental tax relief in the upcoming Union Budget 2023 could help the central government provide consumption support to the Indian economy in FY24 and shield it from the worsening financial environment in the West. Recently, global economic experts, including International Monetary Fund Deputy Managing Director Gita Gopinath, noted that an inflation-driven price shock could disrupt the lives of people …

Private consumption expenditure and demand: Please ma’am, we need some more
2 years, 11 months ago

Private consumption expenditure and demand: Please ma’am, we need some more

Live Mint  

Slowdown in personal consumption is the single biggest problem facing our economy. The double whammy of lower employment and Covid-19 has meant a significant reduction in consumption for low and lower-middle income households. This has meant a delayed recovery on many key sources of consumption – automotive, high value durables, OOH and discretionary spends like retail, restaurants and personal care. …

The recovery toolkit: The Hindu Editorial on tax policy and economic recovery
3 years, 2 months ago

The recovery toolkit: The Hindu Editorial on tax policy and economic recovery

The Hindu  

The latest string of official numbers, including almost-record GST collections, healthy direct tax inflows, strong manufacturing and exports, provide some confidence that the economy has lurched back from the danger zone for the second time in less than a year owing to the COVID-19 pandemic. If September’s activity reflects pre-festive stocking, the actual festive spending may keep GST numbers propped …

Opinion | Fiscal spending will have to do the heavy lifting
4 years, 4 months ago

Opinion | Fiscal spending will have to do the heavy lifting

Live Mint  

India’s June-quarter data reaffirmed the stark weakness in economic activities. Such a dent is leading to major headwinds for private final consumption expenditure, which, with about two-thirds share in overall GDP and usually strong growth momentum, typically provides a strong bedrock for India’s growth. While monetary policy reacted with commendable alacrity with large rate cuts and a heavy dose of …

How growth reshaped India’s destiny, and why we need an encore
4 years, 5 months ago

How growth reshaped India’s destiny, and why we need an encore

Live Mint  

The pandemic-induced recession has brought back memories of 1979, when India’s GDP contracted by more than 5 percent for the first time since independence. And if the GDP growth rate were to revert to the pre-1979 trajectory of 3 percent per annum, it would take nearly 30 years for India’s per capita income to double. India’s growth process over the …

Budget 2020: Income tax rate cuts high on the wish list
4 years, 11 months ago

Budget 2020: Income tax rate cuts high on the wish list

Live Mint  

With Budget 2020 announcements around the corner, the euphoria on Budget expectations are very high. This has put India on the trajectory of significantly high personal income tax rates globally and has come at a time when countries such as the US have reduced personal tax rates. The cuts in individual tax rates will enhance the disposable income and in …

Decisive measures vital to revive India’s growth
4 years, 11 months ago

Decisive measures vital to revive India’s growth

Deccan Chronicle  

The Union Budget 2020-21, to be presented to Parliament by finance minister Nirmala Sitharaman on Saturday, February 1, comes at a time when the Indian economy is facing headwinds from a growth slowdown, on account of both domestic and global factors. CII has suggested that the 2019-20 fiscal target may be relaxed by 0.5 per cent to 0.75 per cent, …

India's weak household consumption to curb economic growth: Moody's
5 years ago

India's weak household consumption to curb economic growth: Moody's

India TV News  

Moody's Investors Service on Monday said that India's weak household consumption will curb economic growth and weigh on the credit quality of Indian issuers in a range of sectors. Moody's has lowered its GDP growth projection for India for the fiscal year ending March 2020 to 4.9 per cent from 5.8 per cent. The major factors responsible for weakening economic …

Why Nirmala Sitharaman’s back-to-back growth booster pills aren’t working yet to cure India's big consumption collapse
5 years, 2 months ago

Why Nirmala Sitharaman’s back-to-back growth booster pills aren’t working yet to cure India's big consumption collapse

Firstpost  

It was in August when Union Finance Minister Nirmala Sitharaman began announcing back-to-back measures to address the economic slowdown. Some of the measures announced this time—withdrawal of enhanced surcharge on foreign portfolio investors and domestic investors restoring the pre-Budget position, quashing angel tax for DPIIT registered start-ups—were reversals of Budget decisions. Targeting the crisis-ridden auto sector, Sitharaman said the government …

India to take more steps to boost consumer demand, economic growth: CEA Subramanian
5 years, 2 months ago

India to take more steps to boost consumer demand, economic growth: CEA Subramanian

Firstpost  

India plans to take more steps to boost consumer demand including injecting liquidity through banks and simplifying personal taxes, a top government economic adviser said on Friday, in a bid to raise economic growth from six-year lows New Delhi: India plans to take more steps to boost consumer demand including injecting liquidity through banks and simplifying personal taxes, a top …

Roadmap to Recovery: The 7 Areas Where Nirmala Sitharaman's Maiden Budget Can Make a Difference
5 years, 6 months ago

Roadmap to Recovery: The 7 Areas Where Nirmala Sitharaman's Maiden Budget Can Make a Difference

News 18  

The NDA government’s first full-fledged Union Budget in its second term comes at a crucial juncture. The government must look to rationalise the tax burden by subsuming stamp duty under GST, restoring input tax credit and relaxing Minimum Alternative Tax, besides implementing a single window clearance for developers. There should also be a clear action plan to fast-track usage of …

India's GDP growth likely slowed to 6.9% in December quarter, data to be out on Thursday
5 years, 10 months ago

India's GDP growth likely slowed to 6.9% in December quarter, data to be out on Thursday

Firstpost  

India’s economy likely grew at its slowest pace in over a year in the October-December quarter as weaker rural incomes and softer urban demand weighed on consumption, a Reuters poll showed Bengaluru: India’s economy likely grew at its slowest pace in over a year in the October-December quarter as weaker rural incomes and softer urban demand weighed on consumption, a …

Consumption-driven GDP growth unhealthy for Indian economy
6 years, 4 months ago

Consumption-driven GDP growth unhealthy for Indian economy

Live Mint  

Economic growth of 8.2% for the June quarter may have beaten all estimates, but the big question is: what kind of growth is it? Private final consumption expenditure growth rose to 8.6% in the June quarter from 6.7% in the preceding March quarter. What’s more, the growth rate has increased despite an unfavourable base—PFCE growth in the June 2017 quarter …

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