The Union Budget’s tax breaks for the middle class were given with an eye on upcoming assembly elections in Delhi and Bihar, and were an overture to a demographic that used to be a loyal vote bank of the Bharatiya Janata Party (BJP) but whose lukewarm response contributed to the party’s sub-par performance in the 2024 general elections, said leaders aware of discussions.
The BJP shrank from 303 seats in the Lok Sabha in 2019 to 240 in 2024, and needed support from its allies to form the government for a third consecutive time.
A senior party functionary said the BJP’s electoral setbacks were “largely” on account of the Opposition’s “false campaign” around the Constitution but also “partly” because of the middle classes staying away.
“Voter apathy was partly attributed to the anger among the salaried classes who complained of less money in hand...But under the leadership of PM Modi, the government has addressed this concern, proving that the party has its ears to the ground,” the functionary said, requesting anonymity.
The government announced a clutch of infrastructure and employment generation schemes for Bihar months ahead of assembly polls scheduled for later this year. The BJP runs a coalition government in Bihar with its key ally, the Janata Dal (United), whose support is crucial at the Centre as well.
No specific scheme was listed for Delhi, where a model code of conduct is imposed for the February 5 elections, but the revised tax exemption limit of ₹12 lakh, is likely to help the party in a city with a large number of salaried workers and among the largest income tax pools in the country.
{{/usCountry}}No specific scheme was listed for Delhi, where a model code of conduct is imposed for the February 5 elections, but the revised tax exemption limit of ₹12 lakh, is likely to help the party in a city with a large number of salaried workers and among the largest income tax pools in the country.
{{/usCountry}}Prime Minister Narendra Modi referred to the budget as a “people’s budget” and his party colleagues said it proved “the BJP has its ears to the ground.”
BJP leaders said feedback from the cadre and the BJP’s ideological fount, the Rashtriya Swayamsevak Sangh (RSS), on the anger over price rise and inflation, and expectations of slashing taxes played a pivotal role in shaping the budget.
“In the last 10 years, policy making was driven towards infrastructure development that in turn led to employment generation and driving the economy. But our cadre and the offshoots of the Sangh conveyed the alienation and disappointment of the middle class, which felt overlooked, as government schemes were focussed on garib, youth, annadata, and nari (poor, youth, farmers and women),” said the functionary quoted above.
A Lokniti-Centre for the Study of Developing Societies (CSDS) study in 2024 showed that the party’s share of middle and upper middle class votes fell from 38% in 2019 to 35% in 2024.
The outreach towards the middle class was also underlined by Union home minister Amit Shah. “The middle class is always in PM Modi’s heart. Zero income tax till ₹12 lakh income. The proposed tax exemption will go a long way in enhancing the financial well-being of the middle class. Congratulations to all the beneficiaries on this occasion,” he said on X.
A second party functionary who is also a national office bearer said the announcements were tailored for the middle class.
“The samarthan (support) for the poorer sections through free ration and other amenities such as free medical care and subsidies for cooking gas have helped the party expand its footprint, but the middle class was feeling deprived of welfare schemes...they may be 20-30% of the electorate but are a force to reckon with...we saw this in 2004 when the India Shining campaign (of the BJP) was rejected by the electorate,” said the second functionary, requesting anonymity.
Offshoots of the Sangh, in their interaction with the government, flagged the concerns of the middle class. Various outfits such as labour unions, farmers’s collectives and MSME groups presented their wish list, but the demand for a tax rejig and more sops for the middle class was a common theme.
A senior functionary of the RSS, also speaking on condition of anonymity, said, “We conveyed the sentiment on the ground...demands such as simplification of the taxation process, insurance for gig workers, expansion of schemes for farmers, a manufacturing policy for Atmanirbhar Bharat were relayed to the government and it is heartening to see many of these demands have been met.”