(Vanam Jwala Narasimha Rao)
Union Budget for the year 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, 2025 to Lok Sabha, to put in her own words, aims at continuing Government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and to enhance spending power of ‘India’s Rising Middleclass.’
The introduction is an ‘Extraordinary Expression of Intention’ with no two opinions. Whether, in ‘Letter and Spirit’ either the entire or few parts of Budget, at least with reference to Middleclass, will be taken seriously is a ‘Million Dollar Question.’
Only when the ‘Letter and Spirit is Sacrosanct’ emphasizing the importance of adhering to both the explicit provisions and the underlying intentions of the budget, then there is a sense in what was articulated in the budget speech.
And hence, this phrase, ‘Letter and Spirit is Sacrosanct’ effectively underscores the critical importance of faithfully implementing the budget’s directives and honoring its foundational objectives emphasized mainly in the introduction. The essentiality of commitment to the budget’s full scope, both in its explicit directives and intended purposes is the crux.
The Budget, introduces several key proposals aimed at benefiting India’s Middle Class, such as raising the income tax exemption limit to Rs 12 Lakhs and enhancing the spending power of Middleclass Households. Tax slabs are restructured simplifying the tax system, making it more transparent and easier for taxpayers to navigate. To what extent ‘Fiscal Discipline’ which is a repeated phrase by every Finance Minister, will benefit Middleclass is to be seen.
Revealing the ‘The Budget Theme’ the ‘Viksit Bharat’ (Developed India) Nirmala Sitharaman recited a stanza of the great Telugu Poet and Playwright Gurajada Appa Rao, the meaning of which in English is, ‘A country is not just its soil, a country is its people.’
Accordingly, the budget theme encompasses zero-poverty, 100% quality school education, access to high-quality affordable comprehensive healthcare, 100% skilled labor with meaningful employment, 70% women in economic activities, and farmers making India the ‘Food Basket of the World.’ Fair Enough. Lofty Ideals and no dispute.
The proposed development measures as spelt out by Nirmala Sitharaman span ten broad areas focusing on Garib (Poor), Yuva (Youth), Anna Data (Farmers) and Nari (Women). Agriculture, MSME, Investment, and Exports are the powerful engines, the fuel is Reforms, guiding spirit Inclusivity, and destination is ‘Viksit Bharat.’ while presenting 2024 Budget also she emphasized the same. Transformative reforms across six domains, Taxation, Power Sector, Urban Development, Mining, Financial Sector, and Regulatory Reforms will augment growth potential and global competitiveness.
The Growth Engine domains and Programs are: Agri Districts; Rural Prosperity and Resilience; Aatmanirbharta in Pulses; Vegetables and Fruits; High Yielding Seeds; Cotton Productivity; Kisan Credit Cards; India Post; Support to NCDC; More benefits for MSMEs like enhanced credit availability; Credit Cards for Micro Enterprises; Fund of Funds for Startups; Labour-Intensive Sectors; Furthering Make in India; Expansion of medical education; PPP; Support to States for Infrastructure; Urban Challenge Fund; Mining Sector Reforms; Medical Tourism; Deep Tech Fund of Funds; Export Promotion Mission; Grameen Credit Score; KYC Simplification etc.
Nirmala further mentioned about: Rationalization of Customs Tariff Structure for Industrial Goods; Relief on import of Drugs and Medicines; Support to Export Promotion in various sectors; Trade facilitation etc.
Touching the Direct Taxes aspect, she told the House that the new income-tax bill will carry forward the spirit of Bharatiya Nyaya Sanhita. Referring to The Thirukkural Verse 542, which reads in English as: ‘Just as living beings live expecting rains, Citizens live expecting Good Governance’ she said that, ‘Reforms are not a Destination, but a Means to achieve Good Governance which primarily involves being Responsive.’
Minister announced her tax proposals, as ‘guided by the spirit of needs voiced by citizens.’ The objectives of her proposals are: Rationalization of TDS and TCS; Encouraging Voluntary Compliance; Reducing Compliance Burden; Ease of Doing Business; and Employment and Investment.
The limit for tax deduction on interest for senior citizens is being doubled (from Rs 50000 to Rs 100000). Annual limit of for TDS on rent is being increased (From Rs 2.40 lakh to Rs 6 lakh). TCS on remittances is proposed to be increased (From Rs 7 lakh to 10 lakh). Time-limit to file updated returns for any assessment year is also increased (From two to four years).
Most important is, ‘Personal Income Tax Reforms with Special Focus on Middleclass.’ Using Rhythmic Words ‘Democracy, Demography and Demand’ as the key support pillars of India’s journey towards Viksit Bharat, and underscoring the importance of Middleclass that provides strength for India’s Growth, Finance Minister announced that there will be no income tax payable up to income of Rs 12 Lakhs which will be Rs 12.75 lakhs for salaried tax payers.
Announcing the Slabs and rates that are being changed across the board to benefit all tax-payers, Nirmala Sitharaman said that, the new structure will substantially reduce the taxes of the Middleclass and leave more money in their hands, boosting household consumption, savings, and investment.
The ‘Beauty of her Speech’ is that, taking pains to illustrate with examples, and suggesting to read the Annexure for more details on taxation. Before Finance Minister Nirmala Sitharaman ‘Commended the Budget to the House’ she revealed that as a result of these proposals, ‘Revenue of about Rs 1 lakh crore in Direct Taxes and Rs 2600 crore in Indirect Taxes will be Forgone.’
Union Budget must be treated as sacred, ensuring that its provisions are not just announced but also implemented with integrity and purpose. Fortunately, the Budget, carries lot of expectations of economic growth, social equity, and fiscal prudence. While numbers and allocations define its structure, which this article is not touching, the true impact lies in how effectively policies translate into action. Any deviation from its core objectives can dilute its essence, affecting millions. This article broadly delves into the key highlights that were in the form of assurances, and implications.
‘Balancing Intent and Impact’ if not in ‘Letter and Spirit’ like for instance with reference to Middleclass Perspective, one of major contours of this article, the foremost to be thought of is that, the budget’s success lie in its ability to translate policy intent into meaningful action. The Union Budget, holds significant implications for India’s Middleclass, a segment that forms the backbone of the economy, but often finds itself in a paradox between aspirations and affordability.
While fiscal measures aim to provide relief and stimulate growth, the real challenge lies in ensuring effective implementation without diluting the core intent by drafting implementation modalities in an incomprehensive manner. Then, intentions remain on paper and implementation ‘Goes with the Wind’ the phrase which became famous as the title of Margaret Mitchell’s only one novel ‘Gone With the Wind.’
At a macro level if we glance in to Budget Speech and Budget Details, the question that requires a precise answer is, how the budget would be able to addresses income tax relief, inflation control, job creation, access to essential services, tangible benefits versus the hidden burdens on the Middleclass etc. among many others. Looking at the Imperatives and Implications part broadly, the economic and social impact of key budgetary provisions needs little more explanation. The feasibility of policy execution within the given fiscal framework, is a certain Implementation Challenge.
Budget’s success is not in its lofty ideals and huge announcements, but in how well it aligns policy objectives with on-ground realities. It is essential to ponder, whether the 2025-26 Budget truly delivers on its promise to the Middleclass or merely reiterates commitments without transformative execution.
Hence Madam Nirmala Ji, please analyze the basic minimum needs of the powerful Middleclass in the everchanging socio-economic scenario, and how to make these needs available and accessible in a manner acceptable to majority, dovetailing your concessions.
(Writer Former Chief Public Relations Officer to First Telangana Chief Minister)
