Delhi elections: How Modi's Budget sweeteners led to long-term 'Capital' gain

AAP, despite its localised governance model, struggled to counter BJP’s national economic narrative.

The Bharatiya Janata Party (BJP) is set to reclaim the reins of Delhi after nearly three decades, ending the decade-long Aam Aadmi Party (AAP) dominance in the national capital.

Trends show that the saffron party is on course for a cruising victory in the Delhi elections, with leads in over 40 seats.

While various factors contributed to the party’s victory, one crucial element that stands out is the humble middle-class voter.

Traditionally perceived as politically disengaged, Delhi’s middle-class voters seem to have shifted their allegiance from AAP to BJP, swayed by the Modi government's recent tax incentives in the Union Budget.

Trends show BJP ahead in 29 out of 38 middle-and-upper-income group constituencies of Delhi, in a massive gain of 24 seats compared to the 2020 election.

Budgeting the ballot

The last lap of the BJP’s campaign in Delhi heavily focused on the tax sweeteners announced by Finance Minister Nirmala Sitharaman in the Union Budget in a bid to strike a chord with the middle-class voters, who make up over 60% of the electorate.

In the February 1 Budget, Finance Minister Nirmala Sitharaman announced a significant increase in the income tax rebate threshold to Rs 12 lakh per annum, to alleviate the financial burden on the middle class and stimulate consumption in a sluggish economy.

The announcement may have wooed millions of voters in Delhi, who have long sought tax relief amid rising living costs.

AAP, on the other hand, attempted to counter BJP’s economic pitch by unveiling a ‘middle-class manifesto,’ an appeal for increased health and education funding and a higher income tax exemption limit.

However, while AAP sought to corner the BJP for not doing enough for the middle class, the Modi government's sweeping tax measures effectively countered this criticism. By showering Goddess Lakshmi's blessings on the aam aadmi—as prefaced by PM Modi himself ahead of the Budget—the BJP ensured the support of its core voter base in the national capital.

Freebies vs financial stability

Both the BJP and AAP had aggressively wooed voters with welfare promises. AAP’s manifesto guaranteed Rs 2,100 per month for women and slashed metro fares for students by 50 percent. The BJP responded with financial assistance of Rs 2,500 for women from economically weaker backgrounds, Rs 500 LPG cylinders, and a free cylinder on Holi and Diwali. Additionally, the BJP's annual metro travel benefits of Rs 4,000 for students and up to Rs 10,000 for skill enhancement under its ‘Mukhyamantri Nirman Shramik Samman Yojana’ also targeted middle-class aspirations.

The middle-class vote swing

With the middle class forming 67.16 percent of Delhi’s population—roughly 28.26 lakh households—political parties had every reason to court this influential demographic.

While there is no singular definition of what constitutes middle-class income, studies peg it within a broad annual income range of Rs 2 lakh to Rs 30 lakh. Historically, this segment leaned toward AAP in both 2015 and 2020, giving it a decisive advantage.

However, survey data from Lokniti-CSDS showed that while AAP’s middle-class support slightly dipped from 55 percent to 53 percent in the last election, BJP’s rose from 35 percent to 39 percent a trend that has seemingly solidified in 2025.

Beyond tax cuts and welfare promises, BJP's strategy extended to grassroots mobilisation through Resident Welfare Associations (RWAs). Given RWAs’ influential role in middle and upper-middle-class colonies, BJP’s engagement with these groups helped consolidate its support base.

Macroeconomics meets micro-concerns

Delhi’s middle-class concerns extend beyond election-time incentives. While India remains the fastest-growing major economy, urban consumption has lagged, job creation remains sluggish, and food price inflation remains a challenge. The government’s forecasted real GDP growth of 6.4 percent for FY25, a drop from 8.2 percent in FY24, suggests economic headwinds ahead—making fiscal policies all the more crucial to middle-class voters.

AAP, despite its localised governance model, struggled to counter BJP’s national economic narrative. Modi’s campaign speeches criticised AAP for failing to transform Delhi into a ‘world-class city,’ further resonating with urban voters.

With BJP set for a decisive mandate, it appears that its bet on middle-class economics, powered by tax sweeteners in the Budget, along with effective voter mobilisation, played a pivotal role in its return.