Boosting Consumption and Reducing Inflation

The Confederation of Indian Industry (CII) has put forward a series of budget suggestions for the fiscal year 2025-26, emphasizing the need to lower excise duty on fuel to stimulate consumption, particularly among lower-income groups. The CII argues that fuel prices are a significant driver of inflation, and reducing these duties could help alleviate inflationary pressures and increase disposable incomes.

Enhancing Disposable Incomes

Chandrajit Banerjee, Director General of CII, highlighted the importance of domestic consumption in India's growth narrative. However, inflationary pressures have somewhat diminished the purchasing power of consumers. The CII suggests that government interventions should focus on enhancing disposable incomes and stimulating spending to sustain economic momentum.

Targeted Government Interventions

The CII also recommends targeted government interventions, such as increasing the per unit benefit under key schemes like MGNREGS, PM-KISAN, and PMAY, and providing consumption vouchers to low-income households. These measures are expected to further enhance rural recovery and stimulate demand for specified goods and services over a designated period.