Empowerment, Growth, and Tax Relief: Economists Applaud Union Budget
Economists have praised the Union Budget 2025 for providing substantial tax relief to the middle class, boosting consumption, and focusing on growth sectors like agriculture, healthcare, and technology. Experts highlight the budget’s role in empowering underserved communities and stimulating economic activity.
Economists have praised the Union Budget 2025 for offering substantial tax relief to middle-class income taxpayers, hoping that these measures will spur economic growth and increase consumption.
Professor MK Agarwal from the University of Lucknow’s economics department commended the government for recognizing the contributions of the middle class. "The middle class has long supported the economy through increased tax filings, and after years of waiting, this relief—especially the ₹12 lakh tax-free income cap—is a welcome change," he said.
Echoing this sentiment, Professor AP Tiwari, former head of the economics department at Dr Shakuntala Misra National Rehabilitation University, emphasized that the tax relief was a response to the economy's sluggish growth. “The finance minister’s decision to ease the tax burden on the middle class will boost their purchasing power, stimulate consumption, and ultimately help kickstart economic activity," Tiwari explained. He also pointed out that the increased demand could encourage more savings and investment, which could widen the tax base and increase government revenue.
Tiwari, however, also cautioned about potential risks, including a loss of tax revenue and possible price hikes due to the surge in demand. He highlighted the importance of coordinating fiscal and monetary policies to address these concerns, adding, “The budget sets out a vision for a self-reliant India, with targeted investments in agriculture, healthcare, and emerging technologies like AI.”
Professor Agarwal further noted the upward revision in the standard deduction and the tax deducted at source (TDS) relief for senior citizens, which he viewed as additional positive steps.
Assistant Professor Smita Mishra of Vidyant Hindu PG College also welcomed the budget, particularly the tax measures that aim to ease the financial strain on the middle class. “This budget provides a clear path toward a self-reliant India, with a focus on sectors like education, health, agriculture, and technology,” Mishra said. She also highlighted initiatives for agriculture, MSMEs, and the increase in the Kisan Credit Card limit to ₹5 lakh, all of which could usher in growth for the rural economy.
Additionally, Mishra praised the announcement of a new scheme offering term loans of up to ₹2 crore to 5 lakh women, as well as members of scheduled castes and tribes over the next five years. "This initiative is a significant step toward empowering underserved communities," she added.
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