India's 2025-26 Budget Targets Middle Class, Boosts FDI Limits

India's Finance Minister Nirmala Sitharaman presented the 2025-26 budget, which aims to boost the spending power of the middle class while fostering inclusive development and private investment. Key features include raising the income tax exemption threshold to 1.2 million rupees and increasing foreign direct investment limits in insurance to 100%. The budget emphasizes strategic investments in agriculture, infrastructure, and MSMEs, with a notable focus on supporting farmers and the rural economy. Critics, however, have raised concerns about potential political motivations behind certain allocations, particularly benefiting Bihar ahead of elections. The stock market responded positively in consumer-driven sectors, with significant gains in FMCG and automotive stocks attributed to expected increases in disposable income. Overall, the budget seeks to balance economic growth with electoral considerations amid ongoing global uncertainties.