Insignia Consultants | India budget aims to boost spending power of middle class, support growth
India budget aims to boost spending power of middle class, support growth
NEW DELHI, Feb 1 (Reuters) - India plans to cut personal income tax rates to boost middle-class spending power, Finance Minister Nirmala Sitharaman said on Saturday, as she announced an annual budget that also sought to increase private investment to strengthen growth.
The world's fifth-largest economy is expected to post its slowest growth in four years next year amid frail urban demand and weak private investment, while stubbornly high food inflation has dented disposable incomes.
Measures to assist the poor, youth, farmers and women were also included in the budget for 2025-26, Sitharaman said, highlighting plans for "transformative reforms in taxation".
The government said people earning up to 1.28 million rupees ($14,800) per year will not have to pay any taxes, raising its threshold from 700,000 rupees. It also lowered tax rates for people earning above the new threshold, with the measures to cost around 1 trillion rupees in tax revenues, Sitharaman said.
