India, Feb. 3 -- India's political economy and its fiscal balance are skewed. A small minority (relative to India's population) of taxpayers contributes the most to tax payments. This money is spent on a lot of heads including welfare programmes of the government. In the past few years, the composition of the direct tax pool has been shifting away from taxes on corporate profits to personal incomes. A large part of this comes from salaried workers in the private and public sector.

The 2025-26 Budget has reciprocated the favour to this taxpayer base by significantly revising income tax (I-T) slabs. This is nothing but a reduction in the real I-T burden. While the political dividends to the government will be immediate, it has taken a calc...