Budget 2025 indicates Modi 3.0 is aware, wary of middle-class angst

Finance minister Nirmala Sitharaman’s eighth budget speech has all the signs of conceding, at least partially, the electoral anxieties Prime Minister Narendra Modi’s government faces in its third term and the failures of her previous policy prescriptions in creating jobs, reducing income inequality and easing agrarian distress. Yet, the Opposition will find it difficult to claim moral victory in forcing Sitharaman’s hand into her still ham-fisted outreach to the middle classes, farmers and other sections for which the budget promises token ameliorative measures.

Middle class outreach

For the past decade, and more so in the past three years, the Opposition has relentlessly attacked the Modi regime for its inability to check spiralling unemployment, rising inflation, stagnating incomes, crippling agrarian crisis and a visible neglect of the social sector. A combination of these issues along with the INDIA bloc’s strong ‘Save Constitution’ pitch was what stunted the BJP’s vaulting ambition of crossing the 400-seat mark in last year’s Lok Sabha polls.

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Sitharaman’s budget on Saturday, arguably more than the one she presented last July, was an unambiguous attempt at cosying up to the middle classes who at long last had become to get uneasy on issues of their stagnant household income and the accompanying assaults of joblessness and inflation. The most obvious example of this is the finance minister’s headline-grabbing budget announcement of an income tax rebate for people in the New Tax Regime with an annual income of up to Rs 12 lakh weeks after the Centre approved rollout of the 8th Pay Commission.

Opposition leaders, including former Union finance minister and Congress leader P Chidambaram, may have dubbed the tax rebate announcement as nothing more than a mere poll-stunt with an eye on the February 5 Delhi polls or the Assembly polls due in Bihar later this year. Off the record though, a senior Congress leader told The Federal, “this is the most telling admission by the BJP that it is scared of the middle class, which formed its most unwavering support base, moving away from it and it is an admission by Modi that Rahul Gandhi was right in saying that the middle class was being cheated by the government but then we can neither criticise the exemption nor praise the finance minister for giving it”.

Did Budget fail farmers?

The middle class’s steady slide into penury due to the regime’s skewed economic policies aside, the other major criticism the BJP faced from its rivals was for its continued disregard of the farming community. Congress’s communication chief and Rajya Sabha MP Jairam Ramesh rightly rued the finance minister’s silence on the long-pending demand of a legal guarantee for MSP, her refusal to grant a UPA-era like massive loan waiver for farmers and failure to improve the existing crop insurance scheme

Also read | Budget: Ambitious schemes fall short of addressing stark agrarian distress

Ramesh’s criticism is fair, but it also glosses over the outreach that Sitharaman has tried to make to the agrarian community with budgetary promises of a Prime Minister Dhan-Dhaanya Krishi Yojana and a ‘Rural Prosperity and Resilience’ programme, enchancing the Kisan Credit Card (KCC) loan limit and identification of 100 districts for crop diversification and setting up of post-harvest storage and irrigation infrastructure. That the Centre, despite its stout denial of India’s agrarian distress, continues with these schemes to somehow ease problems of the peasantry is, in itself, an admission that the Opposition’s criticism of Modi’s handling of the unfolding crises isn’t unfounded.

Significant expenditure cuts

Chidambaram has rightly pointed out that the Union Budget 2025-26 makes significant expenditure cuts in sectors such as health (Rs 1,255 crore), education (Rs 11,584 crore), social welfare (Rs 10,019 crore), agriculture (Rs 10,992 crore) and rural development (Rs 75,133 crore) and in allocations for welfare schemes specifically targeted at scheduled castes, scheduled tribes, backward classes and minorities.

On this score, the Congress party and its regional allies who have stridently branded the BJP as being ‘anti-poor’, ‘anti-Dalit’, ‘anti-adivasi’ and ‘anti-minorities’ will, no doubt, sharpen their knives against the Centre as the budget session resumes next week. However, with no major elections this year except the one due in Delhi next week and the other in Bihar scheduled only around October, Sitharaman, perhaps, felt the Modi government could withstand such a blitzkrieg till next year when the budget provides her with another opportunity for course-correction.

Also read | MSMEs’ day out: Budget push aimed as much at jobs as at pushing sector

Special attention to Bihar

This is not to say that electoral considerations and coalition compulsions have been completely ignored in the Union Budget. Sitharaman craftily circumvented the limitations placed on her by the currently in-force Model Code of Conduct for elections in Delhi with her tax rebate dole that will find its cheerleaders among the robust middle class of the national capital. For Bihar, of course, the budget was presented, as Jairam Ramesh said, a “bonanza”, even if, according to RJD MP Manoj Jha, the promised largesse was “highly deceptive”.

Clad in a Madhubani sari, Sitharaman announced several sops for Bihar much to the chagrin of Opposition MPs, who repeatedly interrupted her with questions on the neglect of other states in the budget. Among the gifts unveiled for Bihar were the setting up of a Makhana Board in the state that accounts for 85 per cent of India’s total ‘makhana’ (foxnut) production, the expansion of IIT-Patna and the Patna airport, central assistance for the Western Kosi Canal Project and establishing a National Institute of Food Technology, Entrepreneurship and Management as well as Greenfield airports in the state, among others.

Watch | Union Budget 2025: Bihar takes centre stage

Bulk of these projects will be spread across electoral strongholds of the BJP and its ally, the JD(U) in North Bihar and the Kosi-Seemanchal regions of the state – a clear attempt to maximise electoral gains of the two parties in these parts when Bihar votes later this year. Besides, these projects are in addition to the litany of schemes and projects that Sitharaman had announced for Bihar in her previous budget. Many of these projects are yet to take off but have given the saffron party some boasting rights in the impending elections.

Fragmented tokenism

With no polls due in Andhra Pradesh for another four years and Chief Minister N Chandrababu Naidu not showing any signs of uneasiness with the BJP just yet, Sitharaman hasn’t made any notable announcements for the southern state. The Opposition can taunt Naidu all it wants for being unable to secure guarantees for his state from the Centre, but then Sitharaman wouldn’t have ignored the TDP chief had these issues not been sorted out already between the top leadership of the two allies.

It is not wrong to say that Sitharaman’s budget is devoid of any big ideas and, instead, is high on a fragmented tokenism towards welfare of the sections the Opposition has been claiming the BJP ignores, or worse, assaults with its pro-rich policy prescriptions. That the finance minister was forced to make even these token concessions or apply, as Lok Sabha’s Leader of Opposition Rahul Gandhi called it, a “band aid for bullet wounds”, may well be because the Opposition’s narrative had begun to hit the BJP where it hurts.