New Delhi, 12 July (IANS). Recent reduction in income tax burden, softening in inflation, low interest rates and favorable scenario for agricultural production are expected to promote rural income and overall consumption in India. This information was given in a latest report.
Private final consumption expenditure is about 60 percent of India’s GDP, so it has a profound impact on India’s overall development scenario.
Continuous improvement in consumption is also important for increasing private sector capital expenditure.
The CARARAGE ratings report said, “We expect a 6.2 percent increase in private consumption in FY 2026, while it has been an average of 6.7 percent in the last three years. In the long run, it will be important to monitor factors affecting domestic income to ensure healthy growth in private consumption.”
Although overall consumption growth has been healthy over the years, recent indicators indicate emerging pressures in urban demand, while the rural demand remains stable.
The report states that in the financial year 26, favorable agricultural production and reduction in inflation are expected to support rural consumption.
Recent policy support, such as RBI cut interest rates, reduction in tax burden and reduction in inflation pressure, is expected to get some relief and support in the near future in the near future.
In addition, the report states that the possibility of good monsoon this year can promote rural consumption.
At a time when income growth has been weak, the increase in household leverage has been observed. By the financial year 2024, domestic debt was 41 percent of GDP and 55 percent of pure domestic purpose income. However, Indian families are less indebted to some emerging economies, such as Thailand (87 percent of GDP), Malaysia (67 percent) and China (62 percent).
The report said that it is necessary to keep a close watch on the unprotected section of domestic liabilities, which has increased in the years after the epidemic.
-IANS
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