India’s incumbent BJP government woos middle class by raising income tax exemption limit upto Rs 5 lakh ($7,030) from the present Rs 2.5 lakh ($3,515).
India’s Finance Minister Piyush Goyal doled out sops for salaried middle class in this year’s interim budget, by offering a full tax rebate on incomes upto Rs 5 lakh ($ 7,030). The current tax exemption limit is Rs 2.5 lakh ($3,515). The increased exemption limit is expected to benefit around 3 crore (30 million) income tax payers, mainly the middle class who form the core support base of the ruling Bharatiya Janata Party. The raise in income tax exemption limit was on expected lines, especially since 2019 being the year of General Elections and India’s middle class has been feeling alienated with the BJP for its economic policies.
Piyush Goyal, who was given additional charge of the finance ministry, had stepped in for Arun Jaitley who had not been in good health for a long time. Jaitley was unable to keep the Indian economy on track and discontent was growing that Narendra Modi government has not been able to keep Indian economy on its high growth path. Goyal stepped in after Jaitley’s illness had worsened making him unavailable to discharge his duties and present this year’s budget. Jaitley had undergone kidney transplant in May last year. While Jaitley is a lawyer, Goyal is a chartered accountant and could gauge the factors ailing Indian economy. Goyal understands that economic sentiment and economic growth are close cousins. Probably, the sops to farmers and raising income tax exemption limits are small tools to improve the economic sentiment in India.