It will not be easy for the Finance Minister to reduce tax in the budget, this is the problem

In a few months from now, the Modi government will present its last full budget before the 2024 Lok Sabha elections. In such a situation, all eyes will be on Finance Minister Nirmala Sitharaman.

In a few months from now, the Modi government will present its last full budget before the 2024 Lok Sabha elections. In such a situation, all eyes will be on Finance Minister Nirmala Sitharaman . This budget will also be important because a financial plan will be presented for such a year, which is going to be full of ups and downs for the Global Economy . The biggest question related to the budget in everyone's mind is whether the government will announce any reduction in income tax in this budget or not. Deciding on this will not be easy at all.

Experts advocated reduction in income tax

Industry organization CII has also said that at a time when there are signs of recession in developed economies, it is important to cut income tax to increase people's income. He says that due to recession, exports will decrease and due to this the pace of domestic growth may slow down.

Goldman Sachs has projected India's economic growth to be 5.9 percent for the next year. He says that the demand of the customers has also suffered due to the high cost of credit. With the recovery in global growth, the pace will return in the next six months of the year.

Inflation will be the biggest concern for the Finance Minister

Where by reducing income tax, people will have more money to spend and this will help in speeding up economic growth. On the other hand, there will also be concern about rising inflation in the mind of the Finance Minister. Signs of decline in inflation are now visible. In such a situation, inflation can also be affected due to increase in spending capacity.

While deciding on the cut in income tax, the Finance Minister will keep in mind the government's fiscal deficit target. It is expected that the government will achieve the fiscal deficit target of 6.4 per cent set in the budget for FY2023. But any deduction on the income tax front can cause problems. Where the government would like to help in increasing the demand by giving more money in the hands of the customers. At the same time, considering the global uncertainties, it will not be an easy decision to cut taxes.