New India Economic Model is all about jobs, more jobs. We need money in the market, and it’s gonna happen when people start spending more themselves.
Let’s understand the economics through an example of biscuit. When you purchase a packet of biscuit you pay some amount to the shopkeeper, that’s just not it. A portion of it will go to the farmer, manufacturer and transporter that supports fuel economy. So, you see in this one transaction there are multiple stakeholders.
Whenever an economy struggles you’d see that the people would be spending less or somehow they are living defensively, saving money in banks or metals.
India has been growing rapidly to fact that it’s the youngest country by population count. I can understand when people who are in the 40s and 50s stock up wealth for retirement, but what is wrong with young people? Why would a young fellow in 20s or 30s live so defensively!! It’s your time to thrive in the world’s largest democratic market. Invest your time and money in market through stocks, startups and much more.
Now, let’s skip to our main topic that would bring more clarity on government’s future plans for the Indian economy.
Decoding – New India Economic Model
As I’ve already said that New India Economic Model is consumer centric. Our deep market research allows us to reach the final conclusion. Before further discussion it’s better to acknowledge these facts of current economic scenario.
- There was a significant reduction in consumer demand.
- Consumers hesitate to spend little extra on themselves.
- Disruptive market, consumers wait to buy the best for the future.
As we need is to understand the consumer mindset. Middle class is the largest consumer of products. Indian economy largely depends on middle class, the more they spend, the better it gets for the market.
Government can encourage people to spend more for themselves, they get a better lifestyle for the family. We have reached the level where things are not limited to fulfilling basic life needs. Consumers want something more – A lifestyle which could earn them health benefits, social engagement and upgrade overall living experience.
How can government encourage people to spend more?
A simple answer to this is tax benefits. Government can abolish annual tax upto the income of 1 Crore. Income tax is not a great source of revenue generation for indian government. We can easily manage without Income tax collection, but this move will boost consumer confidence. People would start spending more on themselves, and that is the whole purpose of New India Economic Model.
What happens when people extra cash in hand?
Well, in simple words – wishlist turns into shopping cart.
Demand picks up that means more manufacturing activities, business expansion and jobs everywhere! Additional jobs will create opportunities for the people who are just getting closer to the middle class, slowly with time they reach there and the middle class base increase that means more consumer spending – this is an unending cycle which goes on without interruption.
In short, the New India Economic Model starts with income tax reforms. Our ultimate goal is to increase middle class base over the time and keep doing it until we remove poverty from India.
New India Economic Model is not just an optimistic thought, but realistic as well. We are expecting positive manufacturing growth in days to come.