Mon Feb 03 01:07:46 UTC 2025: ## India’s Budget 2025: Tax Cuts for Middle Class, Concerns Remain

**New Delhi, India** – Finance Minister Nirmala Sitharaman presented India’s Union Budget 2025-26 on Saturday, announcing significant income tax relief for the middle class while sparking debate over allocations to other sectors. The budget introduces a new tax regime with no income tax payable on annual incomes up to ₹12 lakh (approximately $145,000 USD), impacting an estimated one crore (10 million) additional taxpayers. The Finance Minister stated this move is intended to stimulate consumption and economic growth by injecting more disposable income into the economy.

However, the budget’s reception has been mixed. Opposition parties criticized the lack of substantial support for the poor and marginalized communities, alleging significant cuts in allocations for key social welfare programs targeting Scheduled Castes, Scheduled Tribes, Other Backward Classes, and minorities. Senior Congress leader P. Chidambaram highlighted reductions in spending on education, health, and rural development.

While the agriculture sector received a modest 4% budget increase to ₹1.37 lakh crore, allocations for flagship programs like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MG-NREGS) and Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) remained unchanged from the previous year. Conversely, the “Gender Budget” saw a substantial 37.5% increase to ₹4.49 lakh crore, representing 8.86% of the total budget.

Positive reactions came from various industry leaders. Experts welcomed the government’s focus on boosting exports, investments, and promoting Micro, Small, and Medium Enterprises (MSMEs). The establishment of a new Export Promotion Mission and a digital public infrastructure platform, “BharatTradeNet,” were seen as crucial steps to enhance India’s global competitiveness. Furthermore, several industry representatives lauded the increased FDI limit in the insurance sector to 100% and provisions for the healthcare sector, including the establishment of 200 daycare cancer centers in district hospitals. The increased funding for startups and initiatives promoting technological advancement, especially in AI, also garnered positive feedback.

Despite the positive aspects, some Chief Ministers expressed their discontent. Telangana’s Deputy Chief Minister criticized the budget for neglecting the state’s unique challenges and priorities. Tamil Nadu’s Chief Minister questioned the apparent lack of consideration for the state’s demands. Similarly, Karnataka’s Chief Minister criticized the budget for ignoring several key projects in the state.

The budget also includes the establishment of a Makhana Board in Bihar, the expansion of IIT Patna, and several other infrastructure projects aimed at regional development. The new income tax regime will be formalized through a new Income Tax Bill to be presented to Parliament next week. The overall fiscal deficit for FY26 is projected at 4.4% of GDP. The budget’s long-term impact on India’s economy and its various sectors remains to be seen.

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