Budget 2020

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POV 1 – Propensity to Spend

Experts were of the opinion that the demand slowdown can be countered by putting more money in the hands of the consumers, so that they can spend. The expectation was that the budget will cut taxes. The budget team came up with the innovative solution of cutting the taxes for consumers, if the deductions can be foregone. The savings rate that was already on a downward spiral, as the young consumers wanted to enjoy today rather than save, will be further accentuated. Whatever little savings that the young folks were doing by investing in NPS, ELSS, PPF et.al. to save on taxes will also go for a toss.

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