Modi's 'Tough' Acts May Inflict Budget Discomfort for Middle Class

BANGALORE: After appointed to the country’ highest post, Prime Minister Narendra Modi’s focus was to revive economic growth. Also, he signals tough measures to repair the economy. It is a fact that reviving the economy would come with some unpopular decisions. Though these measures, may impose some short time discomfort on the budget of commoners, it is long-term gains in the form of better employment opportunities and higher levels of income of the masses.
"I am well aware that my steps dent the immense love that country has given me. But when my countrymen would realize that these steps would result in getting the financial health back then I will regain the love," Modi said.
 So, let us have a look at the four ‘tough’ acts likely to be imposed by the new government, as reported by Economic Times.

Diesel price deregulation: With the biggest election win in 30 years, the Modi-led NDA government got the mandate to deregulate diesel prices as well as raise natural gas rates with a clear road map towards free pricing to cut subsidies and shrink the budget deficit.

"As diesel deregulation becomes a certainty, the NDA might consider lowering the cap on LPG cylinders back to nine (from the current 12 bottles per household in a year)," ICICI Securities said. So, upgrade Petrol and diesel prices likely to be hiked by 75 paise a litre each if the new government accepts an expert panel report that recommends nationwide fuel standards to eliminate cancer-causing particle emissions by 2020.
Nitin Jain, CEO Capital Markets at Edelweiss said, "Subsidies are very important in India, where the economic structure is disparate. No country can afford such disparity. However, we need targeted subsidies. The existing subsidy system is plagued with corruption and ineffective distribution."

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