New Delhi: With the Delhi assembly election round the corner, it will soon be clear whether the income tax relief announced Saturday helps the Bharatiya Janata Party (BJP) override one of the factors that favoured the Aam Aadmi Party (AAP) in the 2015 and 2020 state polls—the support of the middle class.
On Saturday, Finance Minister Nirmala Sitharaman announced a hike in the income tax rebate from Rs 7 lakh to Rs 12 lakh. The potential political implications of this move in a city with, arguably, one of the largest middle-income populations in India cannot be overstated.
According to a People Research on India’s Consumer Economy (PRICE) study released in 2023, around 31% of India’s population can be considered middle class. In contrast, Delhi’s middle class accounts for 67% of its population—more than double the national average.
According to the Delhi election-eve survey in 2020 and post-poll survey in 2015 by Lokniti-CSDS, the AAP led the BJP not just among the poor and the lower middle class but also the middle class. Indeed, the AAP improved its vote share among the middle class between 2015 and 2020, Lokniti-CSDS data show.
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The question that follows is whether the AAP could have won an overwhelming majority of 67 seats in 2015 and 62 seats in 2020 without the support of the middle class, traditionally seen as a BJP stronghold.
Speaking to ThePrint, Dr. Chandrachur Singh, who teaches political science at Delhi University’s Hindu College, said that while the announcement on income tax relief might boost the BJP’s campaign momentum, it is unlikely to influence the election outcome significantly.
“Firstly, it’s difficult to define who the middle class is. More importantly, Delhi voters have largely made up their minds already. In Delhi, it’s essentially a vote for or against Modi and Kejriwal. The announcement will assist the BJP in its efforts to counter every aspect of the AAP’s campaign, as the party would not want to leave any angle unaddressed,” Singh said.
Delhi, he added, does not have many floating voters who could be swayed by last-minute announcements. “The Congress’s performance will have a greater impact on the results,” he added.
“For instance, despite Modi’s popularity, the BJP’s vote share in Delhi has neither increased nor decreased. One section of voters will back the BJP no matter what. Similarly, Kejriwal’s support base mainly consists of former Congress voters. If there’s a shift back to Congress, the results may show some volatility, but otherwise, it will be a straightforward AAP-BJP contest,” Singh explained.
Change in Kejriwal’s rhetoric
Little over a week ago, AAP chief Arvind Kejriwal unveiled the party’s election manifesto for the middle class—which included several key demands. One of the most notable was a call for the Centre to raise the income tax exemption limit to at least Rs 10 lakh.
During the launch on 22 January, Kejriwal passionately argued that the middle class, though not universally defined but broadly comprising families with little risk of falling into poverty, has long been exploited, calling it an “ATM for the government” and a victim of “tax terrorism”.
“There is a large class that is completely sidelined. They belong neither here nor there. This class is India’s middle class. No political party today is addressing its concerns,” Kejriwal said, vowing to fight for their rights.
A week later, he wrote a letter to Prime Minister Narendra Modi, accusing the Centre of “prioritising the financial interests of a select few billionaires over the needs of ordinary taxpayers”.
“A middle-class individual who earns Rs 12 lakh annually is burdened with so many taxes imposed by the central government. They pay income tax, GST, service tax, property tax, education cess, capital gains tax, road tax, and more. When all these taxes are combined, a person earning Rs 12 lakh ends up paying at least Rs 6 lakh in taxes—half of their income—to the government. And what do they get in return? Nothing. Absolutely nothing,” the former Delhi CM said.
While the spell that Kejriwal cast over the middle class as an anti-corruption crusader pitchforked him to the political centre stage, it was the support he gained from the city’s lower-income groups through a range of populist schemes that fuelled AAP’s rise over the last decade.
The return of the middle class to Kejriwal’s rhetoric, therefore, signalled a shift in his strategy ahead of the 5 February assembly poll—driven by internal AAP surveys showing the BJP tightening its grip on the city’s middle-income households due to dissatisfaction over a growing visible urban disrepair in Delhi.
Who does the middle-class vote for
Election data contradicts the popular perception that only the poor support the AAP while the middle class remains solidly behind the BJP in assembly election in Delhi.
According to the Lokniti-CSDS study, “The two economic segments among whom (AAP) seems to have actually gained votes and who seem to have been instrumental in taking the AAP past the 60-seat mark are the lower-class and middle-class segments. While among voters belonging to the lower class, AAP seems to have done extremely well, gaining 6 percentage points more votes since 2015, among middle-class voters, AAP registered a small 2-point gain—securing 53% votes—almost the same as its overall vote share.”
The BJP secured the votes of 39 per cent of the middle class in 2020, added the study, pointing out that the party had made impressive gains among the poor voters, winning 33 per cent of their votes, up by 12 percentage points as compared to 2015.
The Lokniti-CSDS had then attributed the surge in middle-class AAP voters to the impact of its schemes such as free power, water, bus rides for women and mohalla clinics, and “a growing dissatisfaction among voters from these two segments with their personal financial condition”.
This is one aspect that has also been underlined in a recent paper—The Politics of Social Welfare—authored by Professor K.K. Kailash of the University of Hyderabad. “The personal financial condition of the citizen could be a factor that influences vote choices,” Kailash wrote in the paper.
“Parties can probably generate goodwill and electoral rewards from welfare programmes only if there is a positive experience when seeking these services. Experience matters, especially when people do not have a favourable opinion about their personal finances and circumstances,” he added.
“In other words, welfare benefits, which are difficult to access, especially when people’s personal economic predicament is not bright, may not bring in the votes. Therefore, parties and governments will have to focus on improving access and other dimensions of the economy that impact personal well-being for electoral rewards,” he added.
This is where the income tax relief may help the BJP override that factor that dented its prospects in 2020.
According to the 2023 PRICE study, ‘The Rise of India’s Middle Class’, economists Abhijit Banerjee and Esther Duflo, who won the Nobel Prize in Economics in 2019, identified middle-class households in developing countries as those spending between USD 2 to 10 dollars (Rs 160 to Rs 800) per day, or at least roughly Rs 58,000-Rs 2.92 lakh per year. PRICE itself considers those households as middle class that earn between Rs 5 lakh to Rs 30 lakh a year. While the Indian government does not have its definition of middle-class, it considers households earning less than Rs 8 lakh annually as economically weak.
Delhi’s per capita income of Rs 4.6 lakh, nearly 2.5 times the national average according to the Delhi government’s 2023-24 Economic Survey, suggests that the PRICE estimate that Delhi’s middle-class accounts for 67% of its population may not be an overestimation.
(Edited by Madhurita Goswami)
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