The 2025 budget brought significant relief to the middle class, with Finance Minister Nirmala Sitharaman making several important announcements. Individuals with an annual income of up to 1.2 million are now tax-free, and the ruling Aam Aadmi Party in Delhi claims credit for this central government decision, attributing it to election pressures. In response to this claim, Amit Malviya, head of the BJP IT cell, said at the India Today-Business Today 'Budget Roundtable' that Arvind Kejriwal speaks a lot but does very little.
'Government Implements Major Tax Reforms'
BJP leader Malviya remarked that beyond tax relief, the budget contains several significant decisions. The new tax slabs aim to increase savings and reduce the tax burden on individuals. Both direct and indirect tax reliefs have been offered, which previous governments did not manage in similar comprehensive reforms. Every public interest program in this budget has been carefully considered to ensure no burden on the economy. Each aspect of economic growth has been thoughtfully included in this budget.
Will these budget announcements benefit BJP in the Delhi elections? AAP leader Jasmine Shah believes the middle class won't be swayed by BJP's allure. Only 2% of the population pays income tax, while everyone contributes through GST and VAT. Hence, a mere incentive affects a very small fraction, with the middle class minimally benefiting. Shah criticized the rising GST rates on essential goods and the perpetual increase in petrol and diesel taxes.
'Falling Investments are a Concern'
Jasmine Shah noted that the budget ignores the fragile state of the economy, which is struggling to surpass 6% growth. The budget fails to address this major concern. Moreover, investments are declining, with FDI hitting a 16-year low, signaling weak rule of law under BJP's authority and discouraging investment. Decisions appear to be made only with the BJP's influence.
Praveen Chakravarthy, chief of Congress's Professional Wing and Data Analytics, stated that only 1.5 million families will benefit from the tax relief. He mentioned that the previous budget promised internships to one crore youth, yet the finance minister overlooked this topic in the recent address. With the youth population rising, ignoring them while discussing growth is not feasible. Even the Chief Economic Advisor acknowledges the fall in private investments.
'Reducing GST Rates is Essential'
Chakravarthy argued against income tax relief without reducing GST rates, pointing out that direct taxes account for merely 35% while indirect taxes are 65%— contrary to global economic systems. The finance minister's adherence to outdated approaches calls for 1991-like reformations to strengthen the economy.
Amit Malviya considers the budget announcement a strategy to fortify BJP's appeal among the middle class before the Delhi assembly elections. Meanwhile, Praveen Chakravarthy and Jasmine Shah accused BJP of exploiting the budget for political advantage rather than addressing economic issues. Chakravarthy stated that the budget targets satisfying voters rather than solving economy-affecting key issues, with Jasmine asserting its negligible impact on Delhi elections.
