As Budget 2025 approaches, discussions intensify on whether Finance Minister Nirmala Sitharaman should prioritize measures to boost consumption. With global uncertainties and domestic economic challenges persisting, stimulating consumer spending could play a pivotal role in accelerating India’s growth trajectory. Consumption accounts for nearly 60% of India’s GDP, making it a critical driver of economic expansion. Experts believe that enhancing disposable incomes through tax reliefs and incentivizing key sectors such as retail, FMCG, and housing could spark a ripple effect across the economy.
One of the pressing concerns is sluggish demand in rural areas, which continues to weigh on growth. Measures like higher allocation to MGNREGA, subsidies for essential goods, and targeted rural development schemes could revitalize spending in these regions. Urban consumption, too, has shown signs of moderation, particularly in discretionary spending categories. Industry leaders have called for policies that reduce tax burdens on the middle class, increase ease of access to credit, and support MSMEs to create more jobs, thereby putting more money into the hands of consumers.
However, the focus on boosting consumption must be balanced with fiscal prudence. Over-reliance on consumption-led growth could widen fiscal deficits if not carefully managed. Economists suggest that while immediate consumption stimuli are necessary, the Budget should also invest in long-term growth drivers like infrastructure, digital transformation, and green energy. By balancing short-term consumption needs with long-term economic resilience, Budget 2025 has the potential to create a robust foundation for sustainable growth.
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