SIMPLY PUT: You are the biggest challenge for both corporations and the Finance Minister right now

Now, when I say ‘you’, it’s not personal. I mean consumers as a whole. So, chill.

However, if you have decided to delay buying a two-wheeler or cut back your spending on groceries, then you may be one of the many people forcing the hand of Finance Minister Nirmala Sitharaman to write that extra tax break into her budget speech. Good job!

Last year, the Finance Minister said the government is gonna spend big bucks on building roads, bridges and tunnels, which would create a lot of jobs, give people the money they need to spend, which will turn into profits for corporations and result in more taxes for the government.

However, as it stands now, corporate profits are growing much faster than jobs or people’s purchasing power.

Now, the government typically denies the unemployment problem. So, let’s assume it is not there and that enough people have jobs, well-paying ones.

Ideally, this should be visible in the sales of everyday items like soaps and shampoos or, for example, in the rising sales of two-wheelers and cars. That’s not the case.

Two-wheeler sales, which is seen as a measure for how well off rural India is, are abysmally low. The total number of two-wheelers sold in the last nine months is less than what it was ten years ago.

The country’s largest consumer products maker, Hindustan Unilever, which sells Horlicks, Rin and Kwality Walls, has sold just about 2 more units of its products in the last three months, for every 100 sold the same time last year. That’s not exciting growth by any measure.

DMart, India’s second biggest retail chain, is still making 8% less revenue per square foot than what it did before the pandemic, according to a recent report by Axis Securities.

If the big corporations are not able to crack the consumer wallets, it’s safe to say the smaller ones are no better off. Now, why is the Indian consumer pinching pennies?

This online poll gives us some indication.

The biggest problem is inflation. Prices of everyday things have gone so sharply that people have to let go of whims and fancies. And as we warned you more than a month ago, it’s gonna get worse before it gets better.

When you, the consumer, cuts back on your spending, it hurts the companies. And that, in turn, hurts the government by reducing the growth in tax revenue. And if things remain unaffordable for long enough, it gets tougher to win elections. Now, there are five states going into polls soon.

So, what is it that the budget can give you and me to make sure we go back to our spending ways.

Watch this short video.