Middle Class Faces Inflation Impact Despite Tax Relief
Tax relief announced for India’s middle class by the government has been overshadowed by the persistent challenge of rising inflation.
Despite a hike in the tax exemption limit, middle-income families are finding it difficult to offset the increased cost of living, particularly in key areas like food, healthcare, and education.
Exemption Limit Hiked, But Inflation Persists
In its latest policy move, the government raised the tax exemption limit to ease financial burdens on middle-class taxpayers. While the measure was initially welcomed, its positive impact has been muted by high inflation, particularly in essential commodities. Experts believe that the middle class remains financially stretched despite the additional relief, as increased prices continue to erode disposable incomes.
Balancing Act Needed
Economists have pointed out that while increasing the exemption limit is a step in the right direction, it is not a comprehensive solution. Rising inflation, which has been driven by global supply chain disruptions and domestic demand pressures, has diminished the purchasing power of middle-class households.
“Tax relief can provide immediate benefits, but long-term measures to control inflation are equally critical to truly alleviate financial stress on the middle class,” said an industry expert.
Broader Reforms Expected
The middle class has been a key focus of government policies aimed at addressing financial inequalities. However, stakeholders are calling for additional measures such as targeted subsidies, lower GST rates on essential goods, and increased support for housing and healthcare to ensure meaningful financial relief.
As inflation continues to impact household budgets, policymakers face growing pressure to strike a balance between short-term tax benefits and sustainable economic strategies to improve the quality of life for middle-income earners.
