Delhi Election Results: Did Nirmala Sitharaman’s income tax cuts fuel BJP’s capital gains?

Delhi Election Results: Union Finance Minister Nirmala Sitharaman announced in her Budget 2025 speech on February 1 that income tax will not be payable up to income of ₹12 lakh.

The tax relief not only boosted middle-class spending power but has also seemingly influenced the economic segment's voting preferences in the Delhi Assembly elections 2025, the results of which are being announced today.

As things stand, the Bharatiya Janata Party (BJP) was leading on 44 of the 70 assembly seats of Delhi, while the incumbent Aam Aadmi Party (AAP) was ahead on 26 seats. A party or alliance needs 36 seats to come to power in the national capital.

The BJP has so far polled about 47 per cent votes, a jump of its 39 per cent in 2020 elections. The AAP is ahead with 43 per cent vote share. The AAP had polled 54 per cent votes in 2020 assembly polls.

If the early trends hold, the BJP is poised to return to power in the capital after a 27-year gap. The last BJP chief minister in Delhi was late Sushma Swaraj, who held the top post for 52 days in 1998. Since then, the BJP has lost six consecutive assembly polls – 1998, 2003 and 2008 – to the Congress and 2013, 2015 and 2020 – to the AAP.

Focus on Middle Class

From President Droupadi Murmu to AAP chief Arvind Kejriwal, everyone seemed to be concerned about the middle class in the run-up to the February 5 assembly polls in the national capital.

Speaking to reporters ahead of the Budget Session on Friday, even Prime Minister Narendra Modi said, “I pray that Maa Lakshmi continues to bless the poor and middle class of our country and continues to shower her blessings.”

President Murmu, who didn't speak a word on the segment in her previous address to Parliament, referred to the middle class at least eight times in her speech kicking off the Budget Session on January 31.

A day after budget, the BJP put out newspaper advertisement about Delhi Elections praising the ‘middle class-friendly' budget 2025.

Kejriwal has also been talking about the middle class. On January 23, the former Delhi chief minister released what his party, the AAP, called the ‘middle-class manifesto.’ The manifesto was a series of Modi government demands, including raising the tax exemption limit.

Who does the middle class vote for?

The AAP started swaying the middle class through its anti-corruption poll plank when it fought its first assembly election in 2013. Years later, the AAP made inroads into poor and lower-middle-class groups that benefit from the party's schemes.

According to a post-poll survey by Lokniti-CSDS, the Bharatiya Janata Party narrowed the gap between it and the AAP among the poor, lower-income and middle-income voters between the 2015 and 2020 assembly polls.

While the AAP was ahead of the BJP by 15 per cent in total vote share in 2020 assembly poll results, the gap between the two parties in middle-class voters was 6 per cent, with the AAP ahead, according to political analysts. Yet the AAP has been labelled as a ‘party of the poor and lower middle class’ – perhaps because of its free subsidies on electricity, water and more.

“The tax slab relief obviously impacted Delhi elections. The BJP has been trying for a long time to puncture AAP's clean government plank. The middle-class voter in Delhi has been swinging. It voted for the AAP in the last election. And the 6 per cent gap has seemingly swung in BJP's favour this time,” banker-turned-political analyst Amitabh Tiwari told LiveMint.

Delhi voted on February 5, four days after the Budget announcement by Sitharaman.

BJP's ‘tax terrorism’: Kejriwal

“I have been to serve across the country. But in Delhi, you have not allowed me to serve. You have seen Congress and AAP for 25 years. Now, please give kamal (lotus) a chance. I promise I will serve you like the head of a family,” Modi said, addressing a rally in the national capital on January 29.

With its focus on the middle class, the ruling party AAP clearly targeted a demographic group that helped it rise to prominence in 2013 after being borne out of the anti-graft movement a year ago.

Kejriwal said that the middle class was a victim of the BJP's‘tax terrorism’ and the most harassed in India. “Fifty per cent of their salary goes into paying taxes. From groceries, milk, curd, to popcorn and even pooja samagri is being taxed heavily,” Kejriwal said, adding that India's youth, which could have helped the country's economy grow, have shifted abroad and are now making money for other countries.

For the BJP, the core vote bank – the upper middle class and trading community — remained intact in the national capital over the years. Still, the number of seats for the BJP decreased from 32 in 2015 to just 8 in the 2020 assembly polls.

More Indians becoming less hopeful: Survey

Before the Budget 2025, the middle class was reportedly disgruntled with the Union government. In the 2024 Lok Sabha election, according to Tiwari, the BJP registered a 3 per cent drop in middle-class voters, while the Congress saw a 2 per cent increase in middle-class votes.

More Indians are becoming less hopeful about their quality of life as stagnant wages and higher living costs cloud prospects, a recent survey showed ahead of Budget 2025.

More than 37 per cent of respondents in a pre-budget survey said they expect the overall quality of life for ordinary people to deteriorate over the next year, the highest such percentage since 2013, findings released by polling agency C-Voter showed on Wednesday.

The sudden focus on the middle class comes days after the Centre announced the 8th Pay Commission for central government employees. “In the last few years, the burden on the salaried class through personal income tax was going against the BJP, which kind of favoured corporates,” said Tiwari.

The Election Commission (EC) had said while announcing the dates of Delhi Assembly Elections in January that no national-capital-centric announcement can be made in the Budget 2025.