Budget 2023-2024 presented by Finance Minister Nirmala Sitharaman on February 1 is seen as a major outreach to the electorate ahead of a slew of assembly elections followed by the general election in 2024.
The budget is being read as all-in-all middle-class, considering the benefits it has offered to the salaried class in terms of its treatment of tax slabs.
Sitharaman announced an extension in tax rebate from Rs 5 lakh to 7 lakh under the income tax new regime. Political observers say the announcement assumes significance as nine states are going to polls in 2023, beginning with Tripura, and the Lok Sabha polls in 2024 when Prime Minister Narendra Modi will be seeking a third consecutive term, a first after the 1960s when Jawaharlal Nehru achieved the feat.
“Income tax rebate is a matter of emotion. The government has keenly focused on the middle class, which decides the fate of politics in the country,” said political analyst Rasheed Kidwai.
The attention to this segment is not a throwaway. The middle class as a cohort has been closely aligned with the Bharatiya Janata Party.
“In terms of tax rebate, the Centre has played a masterstroke before the 2024 elections. Five hundred million people may not be influential, but they are definitely decision makers as far as the political discourse is concerned,” Kidwai added.
In her budget speech Sitharaman said, “Resident individuals with a total income up to Rs 5 lakh do not pay any tax due to rebate under both old and new regimes. It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to Rs 7 lakh.”
Also Read: Budget 2023 | Salaried professionals expect more options for safe investments, tax reduction
She also announced that there will be five slabs instead of six under the new tax regime. Taxable income of up to 3 lakh will be nil, those earning Rs 3-6 lakh will pay 5 percent tax, with the levy going up to 10 percent on Rs 6-9 lakh income, 15 percent on Rs 9-12 lakh, 20 percent on Rs 12-15 lakh and 30 percent above that.
“This was the last full budget of Prime Minister Narendra Modi’s 2.0 government, also the last opportunity before polls to send out signals that his regime cares for people. The tax related announcements by the finance minister are clearly focused on voters,” said Sanjay Kumar, professor at the New Delhi-based Centre for the Study of Developing Societies.
In its last full budget before the polls, the government has prioritised investment, green growth, infrastructure, employment generation and reaching the last mile.
Sitharaman also announced central assistance for drought-prone central regions of Karnataka, where polls are scheduled before May, doling out assistance of Rs 5,300 crore to the Upper Bhadra project to provide sustainable micro irrigation and to replenish surface tanks with drinking water.
Another major push by the government is Pradhan Mantri Aawas Yojana, which is proposed to be enhanced by 66 percent to over Rs 79,000 crore. The last budget allocation was Rs 48,000 crore and was said to be used to build 80 lakh houses in 2022-23 across India for the poor in rural and urban areas.
Observers also said the beneficiaries of aforementioned scheme are important in the BJP's electoral victory.
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