He's attempted to put more money in your pockets by nudging tax exemption limits upwards. But that will still prove to be loose change when you consider that the finance minister hopes to shore up revenues by making almost everything you set out to spend on more expensive. In already inflationary climes, that's not going to help bump up consumption. "The signals are not good considering consumer demand is anyway low due to recurrent price hikes on account of commodity inflation and other macroeconomic conditions," says Manish Sharma, managing director, Panasonic India. "Demand will get dampened and we expect the (consumer durables) industry growth to be hit by 10-15% this year, after last year's dismal singledigit growth rate," he adds. Here's why Sharma is so downbeat. The FM's income-tax proposals will save a maximum of Rs 22,660 for individuals. Now counter that with the relative havoc his move to tax all services (except those on a negative list) and hike the service tax as well as excise duty from 10% to 12%, will wreak on prices of consumer goods.
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