Sunday, March 12, 2006

Budgeting the Future

What does Budget 2006 holds for a common man? We saw FM P. Chidambaram delivering his budget on 28th Feb 2006. Nothing more than, "increase in service tax from 10% to 12%" was talk of the town among majority of the individuals. What went unnoticeable was the reduction in excise duty on small cars, which could badly impact the lower middle class and below, in the near future. This reduction would spruce up the demand for small cars, increasing the demand for fuel. Last year we saw fuel prices increasing as faster as Indian Stock Markets. Fuel prices are the key and important deciding factor for pricing necessary commodities.

E.g. Increase in diesel prices, push's up the transportation cost and thereby increasing the prices of commodities being transported. Though FM has made an attempt on reducing the excise duty on processed food, it anyway won't affect the lower middle class. Since, they form the least population who buy processed food. FM should seriously think about it and come up with a policy that would protect them from being dejected or left out from the budget.

1 comment:

Anonymous said...

This is very true. Soon we could see a rise in petrol prices as demanded by oil companies with IOC demanding around Rs.10 hike. Nice analysis Nehal and interesting blog too.