Budget 2025 is a pragmatic balance of consumption and fiscal discipline: Radhika Gupta
Budget 2025 has moved in a path that at once caters to the immediate requirements of the economy, while continuing on the path to investing for future growth, even while ensuring a tight leash on the fiscal deficit.
Tax slab rationalisation to boost consumption, ease of taxation via higher thresholds for tax deductions (TDS and TCS), tax clarity on ULIP investments, and tax-free withdrawals from NSS investments give the middle class much to cheer about.
At the other end of the spectrum, continuing spends on infrastructure via steady capex outlay, lower-than-expected fiscal deficit, and a nearly unchanged market borrowing programme ensure that the macros are in healthy shape, eventually translating to lower borrowing costs for the government.
The budget projection for a 6.3-6.8% GDP growth in FY26 would place India among the fastest growing large economies in the world.
There has been a continuous clamour over the past few quarters on the squeeze that the middle class is witnessing due to stagnant salaries and a rather heavy tax burden. This has resulted in consumption nosediving, so much so that many corporates raised concerns on slowing demand.
As a remedy to this slowdown, the budget has come with a bunch of goodies on the tax front to give more disposable income to the middle class and to kickstart the consumption story.
Salaried income up to ₹12.75 lakh will become tax free with new rebates in place, up ₹5 lakh from the current levels. The standard deduction amount of ₹75,000 is included in the above calculation. And the 30% tax slab kicks in only from incomes of ₹24 lakh or more, up from ₹15 lakh currently.
There is a potential of ₹1.1 lakh to be saved by a person in the new tax regime compared to her current tax
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