The Indian Budget 2025: A CloserLook at Tax Concessions andEquality

The tax breaks, especially for those under the new tax regime, have received a lot of attention
in the Union Budget 2025, which Finance Minister Nirmala Sitharaman recently unveiled. The
budget has sparked discussion about how it will affect equality in Indian society; critics argue
that rather than reducing economic gaps, these policies may be spreading them.

The New Tax Structure

Tax Exemption: Under the new regime, incomes up to Rs 12 lakh are now tax-exempt, which
was previously Rs 7 lakh. This adjustment aims to provide substantial relief to the middle
class, aligning with the government’s narrative of enhancing disposable income to stimulate
economic growth.
Progressive Taxation: Above the Rs 12 lakh mark, income is taxed progressively, starting at 5%
for income between Rs 4 lakh to Rs 8 lakh, increasing to 30% for income above Rs 24 lakh

Economic Growth vs. Social Equity

Although PM Modi has stated that the government wants to increase consumer spending to
grow the economy, the strategy’s community has been questioned. Given that a sizable
section of the population does not even make the taxable income income cap, critics contend
that such tax cuts fail to address the more general problems of income inequality. According
to the Indian Express, only a small percentage of the middle class will actually profit from
these concessions because the large majority’s real earnings have decreased and many of
them do not make enough money to pay taxes in the first place.

Left Parties’ Perspective

The budget ignores the problems facing the Indian economy, including inflation,
unemployment, and stagnant incomes, according to the Communist Party of India (Marxist)
and other Left parties, who have been outspoken in their criticism. They contend that the
budget increases economic inequality by favoring those with higher incomes rather than
offering comprehensive assistance to the poor. It is believed that the budget’s focus on
reducing government spending while providing tax breaks to a small group of people could
increase the wealth gap.

Middle Class and Beyond

The new tax regime may provide some relief for the middle class, especially those in urban
areas, but it has little effect on those in rural areas or the informal sector, where incomes are
lower and less consistent. The lack of notable increases in funding for areas like social
welfare, rural development, and agriculture feeds the equality debate even more. The
budget’s focus on infrastructure development and new investment is admirable, but the
equality narrative will not be realized unless there are concurrent initiatives to improve social
security, health care, and education for the lower income groups
The Indian Budget for 2025 highlights the ongoing problem of economic inequality while
simultaneously attempting to increase economic activity through tax cuts. Although some
people benefit from these cuts, the larger issue of income inequality remains unresolved.
Policies that address the needs of all societal layers—not just those eligible for tax breaks—
while striking a balance between social equity and economic growth are necessary for true
equality. The ongoing discussion about government budget equality calls for a complex
strategy to guarantee inclusive growth.