Just days before the Finance Minister Nirmala Sitharaman will present the Union Budget 2023, Axis My India released the India Consumer Sentiment Index (CSI) which highlighted that one of the biggest expectations from the budget is reduction in price of essentials. Another major request is reduction in income tax rates, which, in turn, will increase the spending power of the consumers. Axis My India surveyed 6,100 people, wherein 65 per cent belonged to rural India and 35 per cent were from urban India. In terms of regions, while 23 per cent belonged to the Northern parts, 27 per cent were from Eastern India, 28 per cent from Western parts of the country and 22 per cent belonged to Southern parts of India.
The Pre-Budget net CSI score, calculated by percentage increase minus percentage decrease in sentiment, is at +10, up from +08 last month reflecting an increase of 2 points, the report said. Pradeep Gupta, Chairman & MD, Axis My India, said “Consumers are looking forward to the upcoming budget announcements as a ray of hope for better life and livelihood and there is a huge expectation in terms of price control.”
Increase in consumptions
The report suggested that the consumption of essential products has increased. Spends on essentials like personal care & household items has increased for 40 per cent of the families, which reflected a dip by 1 per cent from last month. The net score, which was at +26 last month, increased by two at +28 this month, the report said. Further, spending on non-essential & discretionary products like AC, car, and refrigerator has increased for 5 per cent of families, and expenses towards health-related items such as vitamins, tests, healthy food has surged for 33 per cent of the families. The spending on the overall household increased for 59 per cent of families and showed an increase by 4 per cent compared to last month. The majority of participants in the survey, that is, 73 per cent of them, said that the budget needs to address ‘reduction in prices of essential items like soap, detergent, cooking oil’.
Expectations on tax reduction
The Axis My India survey also said that consumers hope for reduction in income tax rates in the upcoming budget. It said that 26 per cent of the participants are expecting that FM Sitharaman should lower personal income tax rates by 5 per cent and 25 per cent want the exemption limit to be raised beyond Rs 2.5 lakh. Further, it added, “54 per cent believe that the Budget should look into the GST exemption on essential items while 44 per cent want a reduction in the GST rate. 32 per cent wants housing loan exemption limits to be re-looked at.”
Focus on digital initiatives
Consumers are also betting on measures from the government that would fuel digitization in the Indian economy. So what will really fuel this growth? According to the survey, while 32 per cent think better banking networks will fuel the digital economy, 19 per cent believe that better spread of telecom connectivity and 5G will be the way forward and the remaining 18 per cent were of the view that better internet security will prove to be important pillars of digitization. “Consumers are also looking forward to various measures that the government will take towards fuelling digitization in the Indian economy. Overall, despite global headwinds the Indian economy should be poised for further growth in 2023,” concluded Pradeep Gupta.