Union Budget 2025 | Delhi and Bihar polls too on Sitharaman’s mind

National capital has 40 lakh tax payers; BJP in coalition govt in Patna

New Delhi: Inflation-hit middle class loomed large in Nirmala Sitharaman’s record eighth budget, with the Finance Minister betting big on tax rebates for domestic consumers to spur growth in the face of economic uncertainties.

The new tax regime will cost a fortune (the government will have to forgo Rs 1 lakh cr in direct taxes and Rs 2,600 cr in indirect taxes). But Sitharaman hopes it would encourage people to spend more; so does Prime Minister Narendra Modi who said the budget “will increase savings, investments, consumption and growth”.

There are political calculations as well. The immediate target audience for the tax sops may be Delhi’s 40 lakh income taxpayers, where the BJP is locked in a bruising battle with the Aam Aadmi Party for the February 5 elections.

But Bihar, where elections are scheduled for later this year, was also on the mind of the government.

Clad in a Madhubani silk saree, Nirmala offered additional bonanzas including a makhana board, capacity enhancement at IIT-Patna and Patna airport, greenfield airports and a brownfield airport in Bihta.

These goodies are being seen as an attempt to woo farmers, agricultural entrepreneurs, youth and middle class ahead of the polls in the state, where the BJP is in a coalition government with the JD(U).

Conscious of the Opposition’s barbs on alleged ‘corporate concessions’ in past budgets, the government has kept up the allocation for key social sector schemes.

The cumulative allocation for agriculture and allied ministries like fisheries and animal husbandry has been slightly increased from the revised estimates for 2023-24. Health will see a close to double-digit percentage jump.

Allocation for the welfare of scheduled tribes is up by almost 20% to more than Rs 5,000 crore.

For the free ration scheme, the government proposes to spend more than 2 lakh crore, almost on par with last year’s allocation.

The government’s announcement to amend the Civil Liability for Nuclear Damage Act, 2010, to invite foreign and private investment in the nuclear power sector may open up another political front with the opposition.

“To appease Mr Trump, the FM announces the Act will be amended,” Congress leader Jairam Ramesh wrote on X.

The decision comes just ahead of Prime Minister Modi’s visit to the US, his first visit in Donald Trump’s second tenure.

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Union Budget 2025 | Nirmala Sitharaman, as Finance Minister, presented her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', the Modi govt gave income tax relief for those making up to Rs 12 lakh per year in salaried income. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.