government borrowings

How government borrowings affect aam aadmi. For the development project and subsidies , government need money.For money,governmnet go for borrowings. The government will incrase the tax and also the base. More taxes led to less liquid money in the pocket of aam aadmi. Less money will affect their spending pattern. people will start spending less . This will lead to less consumption and less production also. It may cause slump in growth. Government fiscal policy of increasing the tax slab from 1,80,000 to 2,00,000 will however,help the indian people to have more money with them. Government also told to decrease the fiscal deficit from 5.9 % to 5.1 %. that means,less subsidy this year and more taxes .It can be seen that service tax has been raised from 10 % to 12%. the government is also considering including transfer pricing in the corporate sector. Regarding transfer pricing structure, please wait for my nest blog which i will publish soon.