The Economic Drawbacks Due to Demonetization
On 8th November, Narendra Modi’s decision to ban 500 and 1000 rupee notes has propelled the current situation of the economy of the country has come under serious pressure because of the demonetization fiasco. The BJP government is likely to introduce some measures in order to alleviate the consumers and the corporate sector.
Affects on the Indian economy
The Indian economy has been growing steadily over the last few years but with any major acceleration. Demonetization has pulled back the economy significantly and that will be felt in the Jan-March quarter too. This budget will prove how the Government wishes to curb black money and expand its tax payer base.
Changes in the economic structure
The government will likely try to concentrate more on planned spending such as Railways, Roads, Defense and Renewable Energy. The capital market participants will likely meet changes in taxation norms which are now zero for long term capital gains and 15% for short term capital gains. Anymore changes can affect the market sentiments.
The undisclosed income has to be assessed and that will affect direct tax flow to consumers. Banking sector will be strengthened and the income tax exemption will likely be raised to 4 lakhs.