Government ranks over 300 million Indian population in middle class (File)
New Delhi:
The BJP has called on the government to put more money in the pockets of middle-income families in the next budget and reduce raw material costs for small and medium-sized businesses, a party spokesman said on Thursday.
After the impact of the coronavirus slowed the economy in the last two quarters, the government of Prime Minister Narendra Modi wants to increase spending on projects for roads, ports and pipelines in the next fiscal year to revive business and create jobs.
Prime Minister Modi’s Bharatiya Janata Party (BJP) believes that while the poor receive free rations and businesses receive state-guaranteed loans and other concessions, the economy will benefit from the reduction of the middle-class tax bill with more generous standard deductions.
“The middle-income group feels very much and needs some support,” said Gopal Krishna Agarwal, who is in charge of communication and coordination of the BJP on economic affairs.
“Incentive consumption by them would also help the industry,” Agarwal told Reuters a few 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 ranks over 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 was unveiled in parliament on February 1st.
Another proposal is to increase depreciation rates for items such as cars, plant equipment and durable goods, such as refrigerators, so that consumption increases and corporate tax costs fall, Agarwal added.
For small and medium-sized enterprises, the government could also seek to reduce import duties on some raw materials, such as copper and base metals.
“Raw material costs are rising not because of demand, but because of supply constraints for consumer industries and calls for relief,” Mr Agarwal said.