A segment of India’s middle class that has long felt disregarded by government policies, Budget 2024 has caused serious agitation. This group has paid high taxes for more than ten years without seeing much relief. Following Finance Minister Nirmala Sitharaman’s budget announcement on July 23, 2024, the frustration reached a breaking point and a social media outpouring of complaints ensued. Memes, critical posts, and outspoken dissatisfaction brought to light the general sense of abandonment by a government that they have always supported.
Credits: India Today
Tax Burden and Economic Disconnect
The middle class’s alleged disproportionate tax burden is a major source of disagreement. Even though they make up a sizable fraction of the tax paying public, individual taxpayers sometimes believe their taxes are higher than those of corporations. The goal of the corporate tax cut in 2019—from 30% to 22%—was to encourage investment and the creation of jobs, but many people feel that this hasn’t happened and that the middle class is now stuck paying the higher taxes. These sentiments have been further intensified by the current budget’s policies, which include eliminating indexation benefits and increasing the Long Term Capital Gains (LTCG) tax from 10% to 12.5%.
Income Stagnation and Rising Costs
Over the past decade, high inflation has outpaced the growth in middle-class incomes, leading to financial strain. While the budget offered some relief, such as up to Rs 17,500 for salaried individuals in the new tax regime, these benefits are overshadowed by increased taxes on investments. The removal of indexation benefits is particularly concerning for those looking to upgrade their housing or invest in the stock market to supplement their income. The middle class sees these measures as diminishing their avenues for financial growth and stability.
Political Ramifications: The Middle Class as a Decisive Voter Base
For the BJP, the middle class’s discontent has important electoral ramifications. Due to its business-friendly and urban-centric policies, the middle class has historically gone towards the BJP despite having no ideological affiliation with any one party. The BJP’s victories in the general elections of 2014 and 2019 were greatly aided by this backing. But according to recent polls, the BJP lost 3% of the vote in the most recent Lok Sabha election, with some votes going to the Congress.
Political analyst Amitabh Tiwari highlights the importance of the middle class to the BJP’s election victory. The middle class has contributed approximately 35% of the BJP’s overall vote share, or 11% of the national vote. A reduction in this support could have catastrophic consequences similar to the voter movements that contributed to the 2004 overthrow of the Vajpayee government.
Social Media Outrage: A Reflection of Growing Discontent
The reaction to Budget 2024 on social media has been swift and harsh. Prominent figures and pro-BJP handles have expressed their disillusionment, highlighting a growing disconnect between the government and the middle class. Comments such as “Taxes like America, services like Somalia” and criticism of the government’s perceived lack of understanding of middle-class struggles reflect a deep-seated frustration. This online backlash underscores the urgent need for the government to address these concerns to maintain middle-class support.
Future Outlook: A Call for Policy Recalibration
The middle class’s sense of being overburdened and underappreciated calls for a reassessment of government policies. This demographic, crucial for nation-building through their tax contributions, seeks empowerment and recognition through fair and supportive policies. The BJP must consider these aspirations and grievances to restore confidence and support from the middle class.
In conclusion, the middle-class meltdown following Budget 2024 is a significant event with potential long-term impacts on India’s political landscape. Addressing the economic and emotional disconnect felt by this vital voter base is crucial for any party aiming to secure its support in future elections.
