Boost for middle class

|
  • 0

Boost for middle class

Monday, 03 February 2025 | Pioneer

Boost for middle class

Tax reliefs, agricultural boosts and support for gig workers define Union Budget 2025, but concerns about economic growth persist

Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 on February 1, 2025, focusing on stimulating economic growth, supporting the middle class and enhancing agricultural productivity. The Union Budget 2025-26 with a total expenditure of Rs 50,65,345 crore, focuses on economic growth, middle-class relief and agricultural development. On the infrastructure front, capital expenditure there is a modest increase to drive development, though specific figures were not detailed. Meanwhile, the fiscal deficit is projected to be 4.4 per cent of GDP for 2025-26. While the budget lays out ambitious plans to stimulate various sectors, its effectiveness will depend on implementation and overall economic conditions. What must come as big relief for the middle class is raising of the income tax limit. The budget introduced significant tax relief for the middle class by raising the income tax exemption threshold to Rs 12.75 lakh per annum, effectively exempting individuals with an average monthly income of up to Rs1 lakh from paying income tax. This move aims to boost household savings and consumption.

A six-year programme has been announced to increase the production of pulses and extra-long staple cotton and help farmers. The government plans to support farmers by purchasing pulses at guaranteed prices and investing in research and development to enhance cotton yields, thereby reducing dependence on imports. The budget has also proposed registeration of one crore gig workers on the e-Shram portal. This initiative aims to formalise the gig economy workforce and improve their access to healthcare and welfare schemes. An allocation of Rs 11.21 lakh crore was made for capital expenditure, reflecting a modest increase from the previous year. This investment is intended to stimulate infrastructure development and economic growth. Some analysts, including Moody’s Ratings, have expressed concerns that the tax relief measures for the middle class may have a limited effect on overall economic growth. The effectiveness of these measures in significantly boosting consumption and investment remains uncertain. The budget’s capital expenditure increase was modest, which may not be sufficient to drive the desired level of infrastructure development and economic expansion. While the budget outlines ambitious programmes, the success of these initiatives will depend on effective implementation at the ground level. Past challenges in executing government schemes could pose hurdles to achieving the desired outcomes. The Union Budget 2025-26 introduces notable measures to support the middle class and agriculture, but its potential impact on broader economic growth and the effectiveness of implementation remain areas to watch. While the budget’s initiatives are promising, concerns linger about their impact on economic growth and the effectiveness of their implementation.

Sunday Edition

Trump's Second Term: A new dawn for Indo-US relations

09 February 2025 | ANOOP BOSE | Agenda

Dumplings to dragon dance

09 February 2025 | Abhi Singhal | Agenda

Royal Flavours of Mughlai Cuisine

09 February 2025 | Abhi Singhal | Agenda

Swaad-e-dilli

09 February 2025 | SAKSHI PRIYA | Agenda

Serene Retreat in the Aravallis

09 February 2025 | Pawan Soni | Agenda