India’s Union Budget 2025 has brought forth major tax relief work in the form of exemptions of income up to ₹1.2 million per year from income tax. The move forms part of a more significant relief package of $12 billion in tax relief aimed at reinvigorating domestic consumption and spurring economic growth.
The main gainer of this budget is going to be the middle class. Finance Minister Nirmala Sitharaman increased income tax exemption limit, raising it from ₹700,000 to ₹1.2 million. This increase in disposable incomes is likely to increase spending and savings as well among middle-income households.
On the other hand, the budget has been met with mixed reactions from various quarters. Consumer goods companies are expecting increased demand due to higher household expenditure, while infrastructure firms have complained about the minimal increase in capital expenditure. Others are also sounding a note of caution that massive tax exemptions would mean a decrease in government revenue and may hamper public expenditure on essential services.
This move by the government to balance growth in the economy with fiscal responsibility will only have long-term results. Stakeholders across the board will be following the budget very closely and will be looking to see how the budget is actually implemented and impacts the Indian economy.
