Inflationary pressure is one of the challenges faced by consumers in India, the third largest economy in Asia. From salt to fuel, prices of various items have been rising, causing discomfort among citizens. While the Russian invasion of Ukraine is often blamed for the price hikes, the problem is persistent and has not been addressed by fiscal or policy measures.
India’s 5-year inflation rate is 25%, the highest among select G20 countries, after Brazil’s 27% rise. In comparison, China’s inflation rate is 9% and the US, the world’s largest economy, is at 17%. Despite the inflationary pressure, India’s private consumption has been growing at a faster pace than the US. Private consumption and capital formation drive the country’s economic output and currently stands at 58.4% of GDP in Q2 of FY23, the highest since 2013-14.
The Finance Minister, Nirmala Sitharaman, has promised to deliver a budget that brings relief to the lower and middle-income group, as the Modi government seeks to retain the pace of private consumption to fuel growth.
In light of this, here are 10 budget changes that impact consumers amid inflationary times –
- Kitchen Drama: Buying an imported electric kitchen chimney will cost more as the basic customs duty has increased to 15% from 7.5%.
- All the glitz: Imported imitation jewellery will become more expensive as the budget has proposed to raise the basic customs duty.
- Toy Story: Buying imported toys will also become costlier due to an increase in effective customs duty.
- A nut to crack: Importing pecan nuts will become cheaper as the customs duty has been reduced from 100% to 30%.
- Fast & Expensive: Buying an imported car will cost more as the effective customs duty on petrol/diesel-run vehicles in completely-built-unit (CBU) form will increase.
- Desi Charge: Buying a made-in-India electric vehicle is recommended as the import of certain electric vehicles in the CBU form will become more expensive.
- Fury Road: Importing vehicles in the semi-knocked-down form will also become more expensive due to an increase in customs duty.
- Tour de India: Buying an imported bicycle will become more expensive as the effective customs duty is set to rise.
- Up in smoke: The cost of cigarettes will increase with a 16% increase in National Calamity Contingent Duty.
- No silver lining: Buying a silver bar will also become costlier with an increase in customs duty on silver bars.
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