New Delhi, Feb. 6 -- Can tax relief for the urban middle class spark a consumption revival, and help accelerate an economy that has lately been grappling with a slowdown? The governemnt sure hopes so.

In the Union budget presented on 1 February, finance minister Nirmala Sitharaman announced raising the income tax exemption limit to Rs.12 lakh from Rs.7 lakh, which has been touted by many as a potential game-changer. While analysts foresee a boost in demand for consumer discretionary goods and durables, the real question is whether this will translate into a sustained rally in the broader market. For now, the champagne remains on ice.

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Despite initial enthusiasm,...