Union Budget 2026: What India’s Middle Class Wants From FM Sitharaman — And Why It Feels Ignored

On a weekday morning in Gurugram, 38-year-old product manager Rohit Sharma does what he has done for the past three years before leaving for work: he checks his bank balance, scans the latest EMI alert, and wonders how a double-income household with no inherited wealth still feels perpetually stretched.

“My salary has gone up,” he said, “but my life has become more expensive faster.”

Rohit’s quiet frustration is emblematic of India’s middle class as Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2026–27.

A Class Under Pressure

By most estimates, India’s middle class—loosely defined as households earning between Rs. 5 lakh and Rs. 30 lakh annually—accounts for roughly 30–35 per cent of the population, but contributes a disproportionate share of direct taxes.

Ameeque Ahmad, a teacher who teaches Economics at a private school in Delhi, referred to income-tax data, and said that fewer than 7 crore Indians file returns, and an even smaller group actually pays net tax. The salaried middle class forms the most compliant—and visible—segment of this base.

“Yet surveys consistently show its confidence is fragile. “The RBI’s Consumer Confidence Survey has repeatedly flagged concerns around price rise, job security, and household spending capacity, even when headline GDP growth remains strong,” he added.

“Similarly, CMIE’s employment data points to persistent anxiety around white-collar job stability, particularly in tech, media, and services—sectors that disproportionately employ middle-class professionals,” he said.

This disconnect between macro optimism and micro stress defines middle-class expectations from Budget 2026. At the national level, the economy appears to be doing well, but at the household level, middle-class families are struggling—and this gap shapes what they want from the Budget.

Nirnimesh Kumar, who edits FirstDraft, a news website, said that over the past few years, the government has nudged taxpayers towards the new tax regime, offering lower rates in exchange for fewer exemptions. “While this has simplified compliance, it has also left many salaried employees feeling shortchanged. Inflation has steadily eroded real incomes, while tax slabs have not kept pace.”

The demand this year is specific—higher standard deduction under the new regime and a rationalised slabs that reflect cost-of-living increases, added Kumar.

For many, the grievance is psychological as much as financial. “I don’t mind paying tax,” said Durgesh Shastri, a Delhi-based school administrator earning Rs. 27 lakh annually. “I mind paying more every year and getting less in return.”

The Burden of Hidden Taxes

Income tax is only part of the squeeze. Members of the middle class increasingly speak of “hidden taxation”—costs that rise quietly but relentlessly. GST on health insurance premiums, school fees, and essential services has become a flashpoint.

Fuel prices, while politically muted, ripple through household budgets via transport, food, and utilities. Add to this toll charges, municipal fees, and service costs, and the feeling is of a thousand small extractions rather than one large levy.

What the middle class wants is not radical GST reform, but visible relief: rate rationalisation on essentials and transparency on how indirect taxes translate into public benefit.

Education and Health care: Paying Twice for Basics

Perhaps the most bitter middle-class complaint is that it feels compelled to pay twice—once through taxes, and again through private spending. Private schooling, coaching classes, and higher education have become unavoidable even for families ideologically committed to public institutions.

Health care, meanwhile, is a constant source of financial vulnerability; a single hospitalisation can undo years of savings. Surveys by public health researchers repeatedly show that out-of-pocket medical expenditure remains one of the biggest triggers for household debt among lower- and middle-income groups.

Jobs: Beyond GDP Optics

For the middle class, growth numbers mean little without job security and career mobility. Layoffs in tech, contractualisation in media and education, and the rise of gig work have created a climate of professional insecurity.

While employment-linked incentives and skilling schemes are welcomed, the demand is for quality jobs, not just employment statistics. Families want assurance that education will still translate into stable work—not endless reskilling cycles with diminishing returns.

“The middle class feels it is constantly asked to adjust—for demonetisation, for GST, for pandemics, for fiscal discipline—without being treated fairly,” said Shashtri.

“Budget speeches speak of ‘resilience’ and ‘nation-building’, but rarely of fatigue. This year, we wants the government to admit trade-offs that we have been asked to accept, and to stop taking us for granted,” he added.