Considering the current economic conditions, putting more money in the hands of consumers and increasing consumption will be a major consideration in the budget. As it is within the purview of the GST Council to make tax reductions for this purpose, the chances are high that the income tax will be reduced.

The important question on everyone’s mind before the first budget of the third Modi government is whether the continuity of the economic policies will be visible. The best factor before the finance minister is that the financial position of the nation is favorable enough to strike a balance between the seemingly conflicting goals of economy and politics. GDP growth was 8.2 percent, much better than estimated in the interim budget. Direct tax collection has increased by 17.7 percent. There are many positive factors, including a reduction in the fiscal deficit.

What is the priority?

Sustaining economic growth and sustainable growth should be given top priority. At the same time, the RBI received a dividend of Rs 2.1 lakh crore, which is more than expected by Rs 1 lakh crore. Meanwhile, consumption growth is weak at four per cent. What should be considered here is what move to increase consumption.

In this situation, the fact that the GST Council should consider tax reduction makes us think about other possibilities in the budget. Income tax cuts can also be expected in this situation to make more money available for consumption. Considering the fact that the middle class provides strong support to the ruling parties, the possibilities for this are high.

Exemptions can also be expected in connection with the new method of tax assessment. Lowering of slabs and raising of taxable thresholds can be expected. Raising the standard deduction is another possibility.

Welfare measures are also in place

Another area of ​​government priority is welfare measures for the low-income earners. A huge increase in allocation for PM Awas Yojana can be expected. The first cabinet meeting decision of the cabinet to build three crore additional houses through PM Awas Yojana should also be considered here. Expect some new welfare schemes along with Ayushman Bharat and food subsidy.

Differently from the previous one, the first budget of the Modi government is being presented in a manner that requires the support of the constituent parties as well. Especially the positions taken by Chandrababu Naidu of Telugu Desam and Nitish Kumar of JDU will be very impressive. It will also be possible to combine the positions taken by Naidu, who is a reformist, and Nitish Kumar, who is a socialist thinker.