- The upcoming budget in February is likely to see cuts in income tax as well as new rates for people with high incomes.
- The Narendra Modi government is exploring ways to put more money in the hands of consumers, according to a report.
- Consumer confidence is already at a six-year low and is likely to worsen as inflation is expected to spike in the first half of the next year.
- Recent cut in corporate tax rates did not do the trick for the government looking to boost economic growth as consumer demand went from bad to worse.
The ₹1.45 lakh crore corporate tax cut was aimed at boost private investment in creating jobs but businesses are moving slow because even if production of goods and services increase, there is very little demand for them. Come February 2020,
New income tax slabs for 2020
| Income | Exsting Tax Rate | Proposed tax rate |
| Up to ₹2.5 lakh | Nil | Nil |
| ₹2.5 lakh to ₹5 lakh | 5% | 10% |
| ₹5 lakh to ₹10 lakh | 10% | |
| ₹10 lakh - ₹20 lakh | 30% | 20% |
| ₹20 lakh - ₹ 2 crore | 30% | 30% |
| ₹2 crore + | 30% | 35% |
Those earning over Rs 50 lakh have to pay an additional surcharge anywhere between 10% to 37%, depending on the income, the report added. The proposed slabs are currently being reviewed by a committee for direct taxes.
The broad goal is to put more money in the hands of consumers to kickstart the virtuous cycle — more demand leading to more production that may lead to more jobs, which will then further boost consumer demand.
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As it stands right now, 2020 may not be a good year for the Indian economy. “Consumption will take a further hit,” Anirudh Damani, Managing Partner at Artha Venture Fund told Business Insider.