Nirmala Sitharaman's Budget: Relief for Middle Class and Boost for Employment

Finance Minister Nirmala Sitharaman presented the Modi 3.0 government’s first budget, announcing income tax relief for the middle class, a Rs 2 lakh crore allocation for job creation, and significant spending for rural and infrastructure development. The budget also includes measures to support startups, MSMEs, and education initiatives.

Finance Minister Nirmala Sitharaman on Tuesday announced significant income tax relief for the middle class, along with a Rs 2 lakh crore outlay for job creation schemes over the next five years, in the Modi 3.0 government's first budget since the general elections.

Addressing issues of rural distress and unemployment, Sitharaman allocated Rs 2.66 lakh crore for rural development and maintained spending on long-term infrastructure projects at Rs 11.11 lakh crore to stimulate economic growth.

The budget also abolished the 'angel tax' for all investor classes in startups, reduced customs duty on mobile phones and gold, simplified capital gains tax, and raised the securities transaction tax (STT) on futures and options, causing a downturn in stock markets.

In a bid to bolster education, employment, and skilling, the budget provisioned Rs 1.48 lakh crore. For the state of Bihar, Sitharaman announced Rs 60,000 crore in infrastructure spending, while Andhra Pradesh received Rs 15,000 crore in financial aid.

Moreover, the budget raised the standard deduction by 50% to Rs 75,000 and adjusted tax slabs under the new income tax regime, resulting in annual savings of up to Rs 17,500 for taxpayers. Additionally, to spur employment, companies will receive incentives, including reimbursing employers up to Rs 3,000 per month for the EPFO contribution of each new employee.

With optimistic tax collections and higher-than-expected dividends from the Reserve Bank, the fiscal deficit is projected to be trimmed to 4.9% of GDP in 2024-25, with gross market borrowing marginally reduced to Rs 14.01 lakh crore.

The budget also apportioned Rs 1.52 lakh crore for agriculture and allied sectors, credit support for small and medium businesses, and a Rs 1,000 crore venture capital fund for the space sector.

(With inputs from agencies.)