For the last eleven years, Prime Minister Narendra Modi has consistently placed the middle class at the heart of his government’s policy agenda. Be it affordable housing, reduction in inflation, access to quality healthcare, or direct tax relief, the Modi government has ensured that the aspirations of India's growing middle class are not only acknowledged but also empowered.

The recent move to ensure zero income tax for individuals earning up to Rs. 12.75 lakh annually, including the Rs. 75,000 standard deduction under the new tax regime, is yet another bold step in the Modi government’s unwavering commitment to strengthen India’s middle class. This tax relief, which translates into lakhs in savings, is not just a fiscal policy decision; it is a recognition of the hard work and dreams of crores of middle-income Indians who drive India’s economic engine.

A household with two individuals earning Rs. 12 lakh each, totalling Rs. 24 lakh annually, now pays virtually no tax under the revamped new tax regime, compared to approximately Rs. 1.5 lakh earlier, reflecting substantial savings for middle-class families. This reform not only enhances disposable income but also reinforces the government’s unwavering commitment to the welfare of the honest, tax-paying middle class.

What makes this step even more remarkable is that it comes at a time of severe global economic uncertainty. While nations around the world grapple with high inflation, sluggish growth, ongoing trade wars, and unsustainable deficits, India under PM Modi has emerged as a global model of prudent and resilient fiscal management. Despite disruptions from the Russia-Ukraine conflict, volatile global oil prices, and the aftermath of the COVID-19 pandemic, India has kept its fiscal deficit well within manageable limits.

Much of this stability stems from the Modi government’s astute oil diplomacy. By diversifying energy import sources and negotiating favourable crude oil deals, particularly with Russia post-2022, India reduced its oil import bill significantly, saving billions in foreign exchange. This prudent foreign and economic policy allowed the government to continue its pro-people programs without jeopardising macroeconomic stability.

Contrast this with the proposals floated under the previous government that hinted at taxing the middle class at rates of up to 40%, under the guise of redistribution. Such policies, had they been implemented, would have severely constrained household savings and consumption. Instead, the Modi government chose a path of balance, offering relief while maintaining fiscal discipline.

When the world was brought to its knees by the COVID-19 pandemic, many countries, particularly in the West, responded with large cash giveaways. While this boosted short-term demand, it also led to record-high inflation and bloated deficits. In contrast, India under PM Modi chose a path of long-term sustainability. Modinomics during COVID-19 focused on supply-side measures to boost production capacity and ensure that the economy remained resilient even amidst lockdowns.

The Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, which provided collateral-free loans amounting to over Rs. 3 lakh crores, saved lakhs of small businesses from closure. The Production Linked Incentive (PLI) schemes for sectors like electronics, textiles, and pharmaceuticals attracted global manufacturers and expanded India's industrial base. The Atmanirbhar Bharat Abhiyan catalysed a movement for self-reliance, ensuring that India not only recovered from COVID-induced shocks but also emerged stronger and more prepared for future challenges.

These initiatives ensured that even during a period of global economic slowdown, India maintained control over its inflation and fiscal deficit and laid the groundwork for a robust recovery. The middle class, which bore the brunt of pandemic-related uncertainty, found in the Modi government a silent, steady support system.

The tax relief is not just a reward for the hardworking middle class; it is also a well-calibrated economic stimulus. Higher disposable income in the hands of millions of taxpayers translates directly into greater consumption—be it on household essentials, white goods, automobiles, education, or housing. This surge in consumption will act as a multiplier for the economy, especially in sectors like FMCG, real estate, retail, and manufacturing.

The cascading impact of increased consumer demand will lead to greater production, improved capacity utilisation, and the creation of more jobs, especially in labour-intensive sectors. This rise in consumption will naturally boost GST collections and strengthen indirect tax revenues, helping the government fund development without raising tax rates.

As the economy gains momentum, it will also build investor confidence. A vibrant, consumption-led growth story draws in both domestic and foreign investment, encouraging capital formation and technology transfer. Over time, this virtuous cycle paves the way for sustainable growth, reduces poverty, and enhances social mobility, meeting the aspirations of the middle class and the broader population.

From Jan Dhan Yojana and Ayushman Bharat to PM Awas Yojana and now the revised income tax regime, every step taken by the Modi government has been a testimony to its middle class-centric vision. The government has not only safeguarded their interests but also empowered them with better infrastructure, higher savings, quality education, and access to entrepreneurship.

This relief is not a standalone measure; it is the latest milestone in a decade-long journey of trust, reform, and vision. As India moves ahead on the path to Viksit Bharat, the Modi government has sent a clear message: the middle class will always be at the centre of India’s growth story.

With bold policies, fiscal responsibility, and a heart firmly rooted in people’s welfare, the Modi government continues to script a golden chapter in India’s economic history—one where prosperity is inclusive, governance is responsive, and the middle class finally gets its long-awaited due.