Zero Tax Revolution: The Start of ‘Modinomics’ To Boost GDP Growth and Financial Inclusion

1. Many small-scale entrepreneurs will start filing income tax returns, thus becoming part of the organised,  white, legitimised economy.
2. Increasing Rs 12 lakhs return will add magical numbers to our GDP & it will not be surprising that GDP will start increasing and maybe double up within 3 financial years.
3. More Taxpayers will now become eligible for various home loans, etc; hence, their disposable income will increase with increased repayment capacity within the next 3 years.
4. This will lift consumption from the Bottom up, again giving a significant boost to the banking, financial, and manufacturing sectors.
5. This will do what Demonetization could not achieve; it will gradually transform the unaccounted economy into an accountable economy in the next 3 years.
6. All this cumulatively will increase indirect tax revenue collection for the Central and Respective State Governments.

How this budget has the potential to become Modi’s economic masterstroke

The new zero-tax regime proposed in the Union Budget 2025 is a game-changer for India’s economy. By incentivizing tax compliance, boosting disposable income, and driving sectoral growth, it promises to reshape the financial landscape. This visionary move could position Modinomics as a landmark era in India’s economic history.

The author is the chairman of the diversified Rajat Synergy Group. Views expressed above are the author’s own.

Author: Rajat Mohan Pathak