The Union Budget 2025-26 has introduced a major tax relief for the middle class, with Finance Minister Nirmala Sitharaman raising the income tax exemption limit from ₹7 lakh to ₹12 lakh under the new tax regime. This increase surpasses the ₹10 lakh exemption demand made by AAP convenor and Delhi Chief Minister Arvind Kejriwal while launching his party's manifesto for the upcoming Assembly elections. With just days to go before Delhi votes on February 5, the budgetary announcement could significantly impact electoral dynamics in the national capital, where the middle class forms a substantial portion of the voting population.
The tax relief is being viewed as a strategic move by the BJP-led central government to woo middle-class voters, particularly salaried individuals who have long sought tax exemptions to ease financial pressures. The timing of this announcement, so close to the Delhi Assembly elections, has intensified the political contest, putting the AAP in a difficult position as it battles both anti-incumbency and corruption allegations against its leadership. While Kejriwal had positioned himself as a champion of middle-class concerns by pushing for higher exemptions, the Centre's decision to exceed his demand has allowed the BJP to take credit for addressing voter aspirations.
The significance of the middle-class vote in Delhi cannot be overstated. According to a 2022 PRICE survey, 97% of Delhi’s population resides in urban areas, with over 67% of households classified as middle class. The budget’s tax relief is expected to directly benefit this segment, reinforcing the BJP’s narrative of being pro-middle class and putting additional pressure on AAP, which has historically relied on a mix of middle-class and lower-income voters. This development also complicates the electoral equation for Congress, which is attempting to reclaim its lost voter base in Delhi.
Adding to AAP’s challenges, the BJP has fielded Parvesh Verma, son of former Delhi Chief Minister Sahib Singh Verma, against Kejriwal in the prestigious New Delhi Assembly seat. Congress has nominated Sandeep Dikshit, son of Sheila Dikshit, whom Kejriwal defeated in 2013 to make his political debut. The New Delhi constituency, home to many government employees residing in areas such as Connaught Place, Lodhi Colony, and Sarojini Nagar, is particularly impacted by the income tax relief. Government officials, many of whom fall within the newly exempted tax bracket, could find the budgetary benefits persuasive when casting their votes.
Kejriwal’s position is further complicated by growing disillusionment among sections of Delhi's electorate. Reports indicate dissatisfaction with the AAP government's delivery on key promises, including infrastructure improvements and services. Auto drivers, once a strong support base for Kejriwal, have expressed disappointment over unfulfilled commitments. This erosion of trust, combined with the BJP’s aggressive campaign and the tax relief measures, could make the New Delhi contest tighter than in previous elections.
With just four days until polling, the budget’s tax relief is likely to remain fresh in voters’ minds as they head to the ballot box. While AAP has built its reputation on welfare schemes and governance, the BJP’s middle-class bonanza could shift voter preferences, making the Delhi election a closely watched battle with significant national implications.
