Union Budget Aims to Appease Middle Class, Neglect the Rest

Indian Prime Minister Nerendra Modi opened the Indian Parliament Budget Session with a religious invocation stating ‘I pray that Maa Lakshmi (Indian Goddess of wealth) continues to bless the poor and middle class of our country.’ Union Finance Minister Nirmala Sitharaman presented her 8^th Union Budget on 1 Feb. The news that appeased the middle class is that salaried people earning up to USD 13.7K per year will no longer pay income tax. It must be noted that in 2023-24 only 6.68% of India’s population—1.25B after the last census in 2011, now estimated at 1.4B—filed taxes. Out of these, 57% reported zero taxable income. The tax relief overshadowed the fact that 93.32% of people do not pay taxes or that corporate tax collection is lower than taxes paid by salaried individuals. The Budget does not offer any solution to generate employment and enable citizens which is India’s primary concern or ventures to increase income for the government to fund its many programs. Yet, to keep the 800M poor dependent on subsidies, the Budget made an allocation of USD 23.3B for the world’s largest populist free food scheme. While all sectors had expectations belied, let us take agriculture. On the basis of the Economic Survey 2024-25, while agriculture’s share is 16% of Gross Domestic Product, its share in the workforce has increased to 46.1% in 2023-24 from 42.5% in 2018-19. Data reveals that the government has failed to move people from agriculture to other sectors. Yet, the allocation to the Department of Agriculture and Farmers Welfare is 3.4% of the Budget and in spite of announced schemes, is pegged at USD 19.6B. There is no mention of Minimum Support Price for crops, a demand by farmers of Panjab and north India (read more).