FINANCE Minister Ms. Nirmala Sitharaman’s announcement of income tax relief to the middle-class at the fag end of her Budget speech on Saturday acted as a last-ball six that clinched the game in the NDA’s favour with a loud bang. The most-anticipated move on I-T rebate has turned out to be the highlight of the Union Budget 2025 as it spread out many footnotes which hold immense potential of becoming headlines in the coming years. The People’s Budget needs to be welcomed with a round of applause for its precise focus on sectors that needed a balm and a path for the future. The India growth story is totally intact and this year’s Budget should pave way for a holistic economic growth.

 

The middle-class in the country, which forms the biggest chunk of voters, was praying for comfort from the Finance Minister after her Interim Budget in July 2023 offered nothing much on the tax front. Ms. Sitharaman bettered all expectations by giving a massive income tax break by announcing nil tax on income upto Rs 12 lakh with additional provision of Rs 75,000 standard deduction for the salaried class. That more than 85 per cent people will be benefitted by this move shows that the Centre had accepted the underlying sentiment in the country and made a quick course correction. Though the intricacies of the tax slabs in the old and new regimes will take some time to explain themselves, the Modi Government has been successful in winning over the middle-class with one bold move. Away from the I-T benefits for the most loyal voters of the current regime, the Union Budget has rightly picked sectors that needed fillip to spur economic growth. The focus on rural sector and increasing consumption is visible in the decisions as the government brought back the farmer at the centre of its thinking.

 

The slew of measures, including the government-owned procurement of pulses for next four years, will definitely act as a fillip for agriculture and in turn would help in augmenting farmers’ income. Despite the steps taken by the NDA Government for agriculture sector in the earlier Budget documents, farmers are still lagging behind in the economic ecosystem. The Budget has addressed this issue with a focus on hundred districts with low productivity, moderate crop intensity and below-average credit parameters through the Prime Minister Dhan-Dhaanya Krishi Yojana. Another move that will benefit farmers is the increase in loan limit of Kisan Credit Card to Rs 7 lakh from the current Rs 5 lakh. It can promote crop diversification in the country, which has been in the Centre’s focus for last many years. Though the Budget has shied away from pumping in additional capex with a clear eye on the inflation threat, there is enough for all sectors to foster innovation and skill development.

 

The document has prioritised economic progress with strong emphasis on tax reforms and boosting consumption. With additional money in hand, consumers are set to spend which ultimately provides the corporates reason to invest in new capacities, create jobs, and further spur economic growth. All eyes now will be on the Reserve Bank of India as its Monetary Policy Committee (MPC) meets next week to decide on the interest rate. The Budget has provided a clear roadmap for the future without losing sight of the fiscal deficit target. The apex bank should take cue from it and find a middle way on repo rate cut to boost big-ticket investment.