How Will the Indian Middle Class Benefit Due to the Budget 2020?

The 2020 Union Budget in India aims to provide a range of financial benefits to citizens, particularly those from the middle class. While the precise definition of the middle class remains elusive, as it is based on income, the measures outlined in the budget are intended to benefit a wide range of individuals and sectors.

Direct Benefits for the Middle Class

The candidates under schemes like the Widow Pension Scheme can expect financial support, with up to 1000 INR per month for three months. Additionally, eligible individuals will have access to loans with reduced interest rates and improved security compared to previous years. This measure is particularly beneficial for private enterprises, as it is anticipated to reduce layoffs and foster economic stability.

Theoretical vs Practical Benefits of Budget Proposals

Despite the noble intentions of the budget, it's important to note that there is no clear, official classification of Indian citizens as middle, lower, or higher class. The middle class is a classification based on income levels, although no definitive limits are provided. The budget, as a monetary exercise, seeks approval from the Parliament and outlines tax proposals and projected revenues and expenditures. Its primary goal is not to provide special benefits to any specific class of people.

A deeper analysis of the overall budget does not show any particular advantages for the so-called middle class. The shift in personal income tax to a lower rate with no exemptions or deductions is more of a psychological measure, designed to appeal to the masses rather than provide substantive benefits.

Evaluation of Budget Proposals

The 2020 Union Budget is often seen as a less dynamic policy compared to previous budgets. The elimination of various deductions for income tax has been criticized as a measure that benefits the government more than the people. There have been concerns that the absence of job creation measures and the focus on selling loss-making government-owned enterprises (PSUs) are indicative of a lack of confidence in reviving the economy.

The failure to attract foreign direct investment (FDI) has led to suggestions of considering investments from sovereign funds from Arab nations as an alternative. Unfortunately, the benefits of such fiscal policies are more closely tied to class dynamics than to policy intent. The middle class benefits due to their position as a bridge between the less affluent and more affluent segments of society.

Conclusion

While the 2020 Union Budget introduces several measures aimed at stabilizing the economy and providing financial assistance to various groups, including the middle class, the overall impact on this segment of the population is mixed. The reduction in personal income tax may appeal to a wide audience, but the lack of job creation and measures to boost domestic demand remain critical concerns.

In conclusion, any perceived benefits to the middle class are more about their position in the socio-economic hierarchy than the specific policies implemented. To truly benefit the middle class, there needs to be a multifaceted approach that includes job creation, infrastructure development, and sustainable economic growth.