Union Budget 2025 and Delhi Assembly Election

In the union budget presented four days before elections to the Delhi assembly, finance minister Nirmala Sitharaman announced that tax will not be payable up to an annual income of ₹12 lakh, bringing relief to the middle class.

Under the new regime, a tax payer with a yearly income of ₹12 lakh will get a benefit of ₹80000 in tax, income of ₹18 lakh 70,000 and income of ₹25 lakh a benefit of ₹1.10 lakh. Sitharaman also announced that the annual limit for tax deductible at source (TDS) on rent has been raised from ₹2.4 lakh to ₹6 lakh, benefitting small taxpayers.

Political parties have been wooing Delhi’s middle class, which has swung between the Aam Admi Party (AAP) and the Bharatiya Janata Party (BJP) since 2013, in the run up to the elections in the Capital, where the middle class constitutes a larger chunk than the national average.

On Friday, just before the budget session began Prime Minister Narendra Modi had said “I pray that Maa Lakshmi continues to bless the poor and the middle class of our country and continues to shower her blessings.” President Droupadi Murmu, who in her address made frequent references to the middle class, said the government has constituted the Eighth Pay Commission for government employees, laying the foundation for increase in their salaries. She underscored that government employees were also part of the middle class.

Around a week ago, Delhi chief minister and AAP leader Arvind Kejriwal, while announcing a seven-point “manifesto” for the country’s middle class, said the middle class “crushed under the burden of taxes” had become victims of “tax terrorism”.

The government, which will forgo ₹1 lakh crore in tax revenues through the tax reductions, said it will raise household consumption and savings. The BJP, which has been out of power in the Delhi assembly for 27 years, is leaving no stone unturned to win over the middle class support, which it is banking on to defeat the AAP. With the AAP borne out of the Anna Hazare-led anti-graft movement of 2012, it won over the middle class support. While the AAP managed to get a majority of middle class votes even in the 2020 assembly polls, in the 2024 Lok Sabha elections, the tables turned, with a majority of this section backing BJP. Despite its consecutive defeats in the Delhi assembly polls since 1998, the BJP retained its traditional vote bank of traders and upper middle class.

AAPBJP leaderDelhi Assembly Election 2025Finance Minister Nirmala SitharamanUnion Budget 2025