New Delhi: Finance Minister Nirmala Sitharaman’s second budget comes at a time when her government is staring at a prolonged economic slowdown. As incomes dwindle and consumption stagnates, all eyes have been on products that would get more expensive or cheaper in the upcoming financial year.
According to Budget 2020, the products that will now be costlier include tobacco products and medical equipment among others, while skimmed milk, raw sugar, agricultural and animal-based products, and particular alcoholic beverages are all set to become cheaper.
The relative change in the price of these products is due to custom duties and taxes imposed by the central government. As a vast majority of goods are now covered under the Goods and Services Tax (GST), shifts in custom duties remains the key mechanism of change in pricing of goods in the Indian market.
ThePrint looks at the products that are going to get more expensive and cheaper from the next financial year.
Products that will get more expensive
In the run-up to the presentation of the Union Budget, there were reports suggesting that the Narendra Modi-government was likely to raise custom duties on a staggering 300 products.
Eventually, a large number of products saw hike in their custom duties, but the number of products were nowhere as high as 300. The 2020 Union Budget has increased custom duties on cigarettes and various other tobacco products. Duties were also hiked for imported furniture and footwear to 23 and 35 per cent, respectively.
In terms of household items, the custom duty has been hiked to 20 per cent for kitchenware and tableware that is made of the China ceramic, steel, copper, and clay iron. Duties have also been increased on wall fans from 7.5 to 20 per cent.
In terms of imported electrical appliances, custom duties have been increased for imported grinder/mixers, water heaters, hair dryers, toasters, coffee makers, ovens etc.
Additionally, a range of stationery products such as trays, clips, staples, paper trays also saw an increase in their import tax from 10 to 20 per cent. Custom duties have also been raised for particular imported toys — from 20 to 60 per cent.
For certain parts that are used in the manufacturing of air-conditioners and refrigerators, the custom duty has been hiked from 10 to 12.5 per cent. Similarly, import duties have been hiked for particular components used in the manufacturing of mobile phones, such as PCBAs, vibrator/ringer of cellular devices, and their display panels.
A range of auto and auto parts also saw their duties being hiked by 10 per cent, as well as for imported tricycles and scooters by 40 per cent. Custom duties were also hiked for a range of electric vehicles.
Items that will become cheaper
While most of the products are likely to experience a rise in their cost, some goods are also going to become cheaper.
Raw sugar price will come down as it has been exempted from any customs duty. Similarly, agricultural-animal based products, skimmed milk, and tuna bait have also been exempted from custom duties and are likely to become cheaper.
Other goods that saw their custom duties being withdrawn included some select alcoholic beverages, soya protein and fibres.