Citizens look to middle class-friendly budget

India’s Union Budget 2025 is set to be presented by Finance Minister Nirmala Sitharaman on February 1.It carries significant expectations from diverse sections of society. Among the most vocal are India’s middle-class, who find themselves squeezed by persistently high prices, stagnant incomes, and a heavy tax burden. This economic strain threatens not only household stability but also India’s ambitious goal to become the world’s third-largest economy by 2029. The forthcoming budget, therefore, must strike a delicate balance between fiscal prudence and relief measures to invigorate growth.

One of the pressing concerns for the middle class is the relentless rise in living expenses. Essentials such as vegetables and household goods have seen significant price hikes, eroding disposable incomes. Coupled with shrinking real wages and high inflation, this has constrained spending power, leading to reduced consumer demand. This contraction affects industries which depend on middle-class consumption. Fall in consumption affects economic growth.

India’s tax structure, while aimed at bolstering government revenue, has been a point of contention for middle-income earners. The current tax slabs impose a disproportionate burden on this group, leaving limited room for savings and investments. The expectations are high, and one hopes that there would be increased exemption limits this time, higher standard deductions, and a restructured tax bracket system. These measures could provide immediate financial relief and encourage spending, stimulating economic activity.

India’s economic narrative hinges on robust domestic consumption, a key driver of GDP growth. However, the middle-class squeeze poses a threat to this trajectory. If citizens are forced to cut back on discretionary spending, industries from retail to real estate will suffer. This, in turn, will slow job creation and reduce the tax base, creating a vicious cycle of economic stagnation. To prevent this, the government must implement measures that restore purchasing power and consumer confidence.

The 2025 budget provides an opportunity to address these challenges. Some of the key measures that could offer relief and drive growth include raising the income tax exemption limit, incentives for investments in housing, education, and health insurance could further ease financial stress.

Strengthening supply chains and reducing middlemen in agriculture could help stabilise vegetable and food prices. Additionally, lowering import duties on essential commodities might ease inflationary pressures.

Focused investments in infrastructure, manufacturing, and technology sectors can generate employment opportunities, boosting incomes and consumer spending.

Expanding subsidies for essential commodities and services could directly alleviate the financial burden on households. Enhanced social welfare schemes targeting education, healthcare, and affordable housing would also improve quality of life.

Encouraging investments in digital infrastructure and renewable energy can position India for long-term growth while creating jobs and reducing environmental costs.

Hence, the Union Budget 2025 represents a critical juncture for India’s economic policy. By addressing the middle class’s concerns, the government can lay the groundwork for sustained economic growth. Balanced tax reforms, inflation control measures, and targeted welfare programs which are essential to revitalise consumer confidence and ensuring that India’s growth story remains on track. As Finance Minister Sitharaman takes the podium, the nation’s eyes will be on her ability to deliver a budget that meets these aspirations while maintaining fiscal discipline.