In a significant move to boost consumption and stimulate economic growth, Finance Minister Nirmala Sitharaman has unveiled a budget that offers substantial tax relief to India’s middle class. Under the new provisions, individuals earning up to ₹1.2 million ($13,800) annually will be exempt from income tax, while adjusted tax brackets will benefit those with incomes up to ₹2.4 million.
The government has also eased regulations on second home ownership and reduced duties on various consumer goods, measures expected to cost the exchequer approximately ₹1 trillion in revenue. This shortfall may impact capital expenditure plans. The state of Bihar is poised to benefit significantly from the new budget, a move seen by some as strategic ahead of upcoming elections. Additionally, increased support has been allocated for start-ups and gig workers.
Analysts are now watching to see if the Reserve Bank of India will consider cutting interest rates to further support economic growth. In a related development, the Indian government has reduced import duties on certain motorcycles, a move interpreted as an effort to maintain favorable trade relations with the United States.