New Delhi, Feb 2 (PTI) – In a historic move aimed at stimulating demand and accelerating economic growth, the government has introduced significant income tax relief, Economic Affairs Secretary Ajay Seth stated on Sunday. The Finance Ministry has projected a nominal GDP growth of 10.1% for the upcoming financial year, with the latest tax cuts expected to provide a much-needed boost to consumption and private investment.
Finance Minister Nirmala Sitharaman, in her Budget 2025 announcement on Saturday, unveiled major tax concessions for the middle class. Under the revised tax structure, individuals earning up to ₹12.75 lakh per annumwill now be exempt from paying income tax. This move is set to benefit 1 crore taxpayers, though it will cost the exchequer approximately ₹1 lakh crore.
The Economic Survey 2025 has projected GDP growth between 6.3% and 6.8% for the financial year 2025-26. This optimistic outlook is supported by a robust external account, measured fiscal consolidation, and stable private consumption trends.
With the government’s latest pro-middle-class tax reforms, economic experts believe that increased disposable income will enhance consumer spending, further strengthening India's growth trajectory.
Finance Minister Nirmala Sitharaman, in her Budget 2025 announcement on Saturday, unveiled major tax concessions for the middle class. Under the revised tax structure, individuals earning up to ₹12.75 lakh per annumwill now be exempt from paying income tax. This move is set to benefit 1 crore taxpayers, though it will cost the exchequer approximately ₹1 lakh crore.
Tax Cuts to Address Domestic Economic Challenges
Speaking to PTI, Seth emphasized that the Union Budget aims to counter domestic economic challenges through strategic fiscal measures.While acknowledging global geopolitical uncertainties, Seth pointed out that domestic economic factors remain within the government's control."A very significant tax relief has been provided to all taxpayers, especially the middle class. This is a conscious effort to stimulate consumption and private sector investment, which are currently below the levels required for sustained high growth," Seth said.
"The budget introduces targeted interventions to drive growth towards the upper range of projections, around 6.8%," he added.
Budget Growth Projections Realistic, Says Seth
Addressing concerns over the feasibility of budget projections, Seth reaffirmed the 10.1% nominal GDP growth target as realistic and achievable.The Economic Survey 2025 has projected GDP growth between 6.3% and 6.8% for the financial year 2025-26. This optimistic outlook is supported by a robust external account, measured fiscal consolidation, and stable private consumption trends.
With the government’s latest pro-middle-class tax reforms, economic experts believe that increased disposable income will enhance consumer spending, further strengthening India's growth trajectory.
