Middle Class Tax Relief on the Horizon: Will Modi's Prayers Be Answered?

Economist Rumki Majumdar anticipates that Finance Minister Nirmala Sitharaman's upcoming budget could provide tax relief for the lower middle class, particularly for those earning between Rs 7 lakh to Rs 10 lakh annually. This move aims to boost consumption and support economic growth amidst rising costs and increased spending.

As Finance Minister Nirmala Sitharaman gears up to present the budget, expectations are high for tax relief targeting the lower middle class. Economist Rumki Majumdar predicts that this relief will focus on individuals within the Rs 7 lakh to Rs 10 lakh income bracket, a strategic move to invigorate consumption and stimulate the economy.

The sentiment finds resonance in Prime Minister Narendra Modi's remarks invoking blessings from Goddess Lakshmi, hinting at potential fiscal measures for the middle class. Majumdar hopes that the Prime Minister's prayers will translate into practical benefits through Sitharaman's fiscal strategy.

With rising costs in sectors like travel and hospitality, middle-class consumers are feeling the pinch. Majumdar suggests that by offering exemptions within this income slab, the government could enhance spending power, thereby driving economic activity. This strategic tax relief is feasible, as it poses minimal revenue loss and could be balanced by broadening the tax base and addressing fiscal inefficiencies.

(With inputs from agencies.)