India’s budget gives relief to the middle class to promote expenses, development. Business and economy news
The reduction in income tax rates as the world’s fifth largest economy focuses on domestic demand and economic growth.
Indian Prime Minister Narendra Modi’s government has unveiled an annual budget focused on increasing economic growth by appealing to the middle class of the country and promoting agriculture and manufacturing.
Announcing the annual budget in Parliament on Saturday, Finance Minister Nirmala Sitaraman said that people earning up to 1.28 million Indian rupees ($ 14,800) per year will not have to pay any tax by increasing the threshold by Rs 700,000.
The government also reduced tax rates for people earning above the new border, as the fifth largest economy in the world is aimed at promoting domestic demand amid uncertainty on the global economic outlook due to potential new tariff barriers.
“The new structure will reduce taxes on the middle class and give up more money in their hands, promoting domestic consumption, savings and investment,” Sitarman said.
As a result of the move, an annual 1 trillion Indian rupee ($ 11.6BN) will be hit in Treasury Revenue, the Reuters News Agency.
The agency said that the world’s most populous country has expected to post its fastest growth in four years next year, between urban urban demand and weak private investment, while high food inflation has disposable income Has reduced
Sitarman said that measures to help the poor, youth, farmers and women were also included in the budget of 2025-26.
The per capita income is about $ 2,700 for India’s 1.4 billion population, with about one -third of the middle class.
HDFC Bank economist Sakshi Gupta told Reuters that tax deduction is likely to increase the demand and savings of the consumer by the middle class.
To balance lost revenue, the government has made a budget for a slight increase in capital expenditure this year, which will increase to Rs 11.21 trillion in 2025-26 as compared to 10.18 trillion in the current year.
In his third term as the Prime Minister of the country, Modi has faced pressure to produce more jobs to appeal to the middle class of the country and maintain development.
The government will promote productivity in the agricultural sector by launching a nationwide program to pursue high yielding crops, focusing on pulses and cotton production cultivation.
Sitarman said the program would target at least 17 million farmers and increase them from $ 3,460 to $ 5,767 to increase the limit of subsidized credits.
The government has planned to formally register India’s gigered workers and reduce their access to healthcare. Sitarman said that the government would issue an identity card to him and help them to take welfare initiative.
According to estimates from the government think tank, Niti Aayog, India’s giggling economy can provide employment to more than 2330 people by 2030.
Sitarman also announced a new fund for startups and said that the government would provide more funds to promote innovation in partnership with the private sector.
He announced a nuclear power mission to run India’s infection towards clean energy, with the goal of developing at least 100gw nuclear power by 2047.
