Most OK with Rs 20K monthly pay, want tax free income of Rs 4.3 lakh

When the going gets tough, even small earnings seem good enough.

Reflecting desperate situation when people are caution down on their own expectations and aspirations, a pre-budget survey has shown people feeling happy with Rs 20,000 income a month.

Ahead of the Union budget on February 1, most people feel they should be having a tax fee earning of 4.3 lakhs per year to manage an average quality of life for their family. At present, annual income upto Rs 2.5 lakh is exempt from income tax.

For the last 10 years, the demand that tax exemption should be no less than 4 lakhs per annum has continued.

In an -CVOTER survey comprising a sample size of 4,292 participants and conducted over the last two weeks of January, 51.5 per cent people said that Rs 20,000 income a month is required for an "average" quality of life for a family of 4 people. As many as 23.6 per cent people consider a monthly income of Rs 20,000-30,000 good enough to support a family of four.

In 2019, 50.2 per cent participants had considered Rs 20,000 monthly income good enough for leading an average quality of life. This effectively means Rs 5,000 for each of the persons.

As Rs 5,000 would go towards meeting the most basic needs such as food, shelter and clothing, it is a serious question as to how other needs like education, medical, social security etc will be met.

The survey result seems reflecting the ground reality of stagnant income and rising expenditure. A section of economists has said that the economy is currently in the grip if stagflation characterised by falling GDP and rising inflation.

A lower income expectation suggests most people are grappling with the challenge of keeping their jobs and current income in case they are self-employed. They are concerned more about their basic needs and essential expenses.

In December 2019, an RBI survey had also shown that consumers sentiment was low and they cut down on their non-essential expenditure such as going on vacations, eating out and buying cars.

An economist who did not wish to be named said that following demonetisation there was liquidity crunch in the market so people cut down their non-essential spends. They subsequently realised that they can carry on their lives without making such expenses.

"Demonetisations has brought permanent change in spending behaviour of the people," he said.

( With inputs from IANS )