Faced with a challenge of managing fiscal deficit without hurting the consumer sentiment, the Union Budget increased the prices of products and services while providing only a token succour by way of relief on personal income tax.
After a few weeks of moderation, inflation has already started climbing up. It was 6.9% last month. The RBI said on Wednesday that there were risks of it getting out of hand. The budget proposals may end up stoking it further.
The bite would be felt most by those aspiring for a new car. The automotive industry has for the first time endured an across the board hike in duties. While the general increase in excise duties makes small cars dearer, taxes on large cars have also jacked up between 2 percentage points and 5 percentage points.
Making your own house also gets dearer. The increase in duties of cement would be felt directly by the housing sector. Coming as it does on the back of a steep hike in freight rates for the commodity, cement would now be worth its weight in gold.
“There is nothing to cheer about in Union Budget rather it is a matter of concern for developers and buyers as a whole,” said Pradeep Jain, chairman, Parsvnath Developers. “Application of TDS on purchase and sale of property and increase in service tax by 2% will make property more costly in the coming days.”
Other products that will be come dearer include cigarettes, hand rolled bidis, chewing tobacco, gold bars and unbranded jewellery.
There is some good news for the fashionistas though. Readymade garments and non leather footwear would be cheaper, as also LED lamps and mobile phones.
On the wrong side of inflation