Budget 2022 should boost consumption via tax breaks, fuel tax cuts: Report

 In a pre-budget report, India Ratings said it expects the new budget to consolidate and strengthen the plan set out in the last budget

The forthcoming budget needs to delay fiscal consolidation, instead should focus more on supporting the pandemic battered-economy and boost consumption demand by offering income tax soaps and cutting fuel taxes, says a report.

In a pre-budget report, India Ratings said it expects the new budget to consolidate and strengthen the plan set out in the last budget, rather than trying out new things by continue with the revenue and capital expenditure pattern of FY’22 to provide stability and consolidation to the past/ongoing efforts, and to focus on boosting demand by generating employment opportunities in areas/sectors that have been impacted more by the pandemic.

The report therefore expects the finance minister to delay fiscal consolidation and make it to be a gradual and calibrated process, thus ensuring the necessary fiscal support that the economy needs is available till the recovery acquires its own momentum.Calling for tax reliefs to households to boost demand as the purchasing power of households was badly hit since the pandemic, the report said this could be done through some income tax reliefs and lowering taxes on oil products as higher fuel prices has been driving up inflation…Budget 2022