Finance Minister Nirmala Sitharaman finally moved in the Budget for FY26 to douse middleclass ire that it had received nothing in return for being the government's staunchest support base since the National Democratic Alliance's rise to power in 2014.

In one stroke, Sitharaman raised to ₹12 lakh from ₹7 lakh the annual tax exemption threshold under the so-called New Tax Regime (NTR), which she had introduced five years prior, and lowered a range of tax rates, sacrificing an estimated ₹1 lakh crore in revenue.

Sitharaman's Budget was at least partly designed to address perceived middle-class resentment at a time of slowing economic growth that the vital demographic had not received its due from her previous fiscal packages, which had focused on boosting investment in infrastructure, stoking manufacturing and stirring corporate activity and rural spending. Lack of sufficient job creation has been another grouse.

"By increasing income tax exemptions and putting nearly ₹1 lakh crore back into the hands of consumers, disposable income will rise significantly. This move will stimulate growth in key sectors like FMCG (Fast Moving Consumer Goods), real estate, and textiles," says Naveen Malpani, Partner and Consumer Industry Leader at Grant Thornton Bharat.

Indeed, Prime Minister Narendra Modi described the Budget as the most pro-middle class in Indian history, comparing the exemption limit and tax payable with what prevailed during the terms of his Congress predecessors.

True, the Budget had no shortage of critics. Congress leader Rahul Gandhi likened the Budget to a "band aid" to dress "bullet wounds."

"The masses deserved money in their hands. That means GST (Goods and Services Tax) should have been cut or taxes on petrol and diesel should have been reduced," former Finance Minister P. Chidambaram said at the India Today-Business Today Budget Round Table 2025 on February 5.