InvestorQ : If the savings rate in India is really falling, why did the Finance Ministry design Budget 2020 that actually discourages Section 80C savings?
Dilmini Mercia made post

If the savings rate in India is really falling, why did the Finance Ministry design Budget 2020 that actually discourages Section 80C savings?

Answer
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Dhwani Mehta answered.
7 months ago


That is an extremely interesting question and frankly that beats me too. When your household savings rate is falling from 23% to 18%, the budget should have actually encouraged households to save more. Instead, at a time when Indian savings are falling to multi-year lows, budget has encouraged consumption spending at the cost of long term savings. Doing away with the tax incentives for savings with the lure of lower taxes could take away the incentive to save. What India needs right now are more savings and not less savings? It is time to seriously think up ways to increase the savings and not to reduce the savings rate! If Indians give up LIC endowments and PPF and MFs, they are left with little by way of savings or social security.