Union Finance Minister Nirmala Sitharaman will present her eighth consecutive budget on Saturday in which a cut or change in income tax rates / slabs is expected to provide relief to the middle class struggling with inflation and stagnant wage growth. The Finance Minister may also take measures to support the weakening economic growth in the budget for the financial year 2025-26 while sticking to the draft of reducing the fiscal deficit.

After Prime Minister Narendra Modi invoked the Goddess of Wealth for the upliftment of the poor and the middle class, hopes of income tax relief have increased. Especially the lower middle class may get some relief in the budget. Deloitte India economist Rumki Majumdar said that the first quarter figures point to a significant increase in private consumption and a slight improvement in investment activity.

She said that with the completion of elections in India, it is expected that government spending will increase, which will support growth in the coming quarters. She said that the government will continue to prioritize efforts towards skill development and employment generation.

Ernst & Young (EY) expects capital expenditure to increase by at least 20 per cent to boost economic activity. DK Srivastava, chief policy advisor at EY India, said that amid the challenging economic scenario, the upcoming budget should balance fiscal restraint with growth measures.

Radhika Rao, senior economist at DBS, said that the central government can prioritise macro stability by sticking to the path of fiscal consolidation and staying away from populist measures.

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