 "Budget 2024: What did FM Nirmala Sitharaman say about the middle class")
Union Finance Minister Nirmala Sitharaman presented her seventh consecutive Budget on Tuesday amid high expectations from the middle class for tax relief. While the Budget highlighted several focal areas such as employment, skilling, MSMEs, and the middle class, netizens have expressed dissatisfaction, noting a lack of relief for the middle class.
So, what does the middle class get from the latest Budget announcement and how did it miss the mark in addressing the middle class’ chief concern?
Budget focus on education, employment, skill development
The Budget has allocated Rs 1.48 trillion towards education, employment, and skill development. FM Sitharaman outlined nine priorities for the Budget, which include:
1. Productivity and resilience in agriculture
2. Employment and skilling: Emphasising job creation and skill development to boost employment.
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3. Inclusive human resource development and social justice: Promoting inclusive growth and ensuring social justice.
4. Manufacturing and services: Supporting the growth and development of the manufacturing and services sectors.
5. Support for promotion of MSMEs: Providing necessary support to boost MSMEs, which are crucial for economic growth.
6. Urban development: Investing in urban infrastructure and development.
7. Energy security: Ensuring stable and sustainable energy supply.
8. Infrastructure: Investing in infrastructure development to support overall economic growth.
9. Innovation, research, and development: Encouraging innovation and investing in research and development.
Urban housing development initiatives
The Budget also placed a significant emphasis on urban development under the PM Awas Yojana Urban 2.0. This includes investment in urban housing development, with the central government investing Rs 10 trillion to address the needs of 10 million urban poor and middle-class families.
Policies and regulations will also be implemented to create efficient and transparent rental housing markets.
Additionally, a scheme to develop 100 weekly ‘haats’ or street food hubs in select cities is envisioned.
The government also announced plans for transit-oriented development in 14 large cities with populations above three million. Infrastructure development also includes the promotion of water supply, sewage treatment, and solid waste management projects for 100 large cities through bankable projects.
Budget misses middle-class tax expectations
Despite these initiatives, the middle class has voiced dissatisfaction, particularly regarding the absence of personal income tax relief. Many hoped for tax cuts which could increase disposable income and stimulate spending, thus aiding economic recovery.
This has also been expressed in Budget expectations, with many complaining about the rising food costs in the market.
Despite the economy expanding by 8.2 per cent in the past financial year, private consumption, which makes up over half of the GDP, grew at a much slower pace of 4 per cent.
To stimulate consumer spending, it was anticipated that the government might reduce personal income tax for individuals with annual earnings between Rs 5 lakh and Rs 15 lakh, who currently face tax rates from 5 per cent to 20 per cent. However, no such measures were announced today.