Modi faces middle class ire over budget

NEW DELHI — Indian Prime Minister Narendra Modi, smarting from setbacks in the April-June general election, is now being berated for last week's budget by the country's swing voters, the middle class, putting his party on the defensive ahead of polls in three states and federal territory.

The budget raised taxes on gains from retail investments in financial markets, left income tax rates untouched despite talk there would be relief and removed some real estate tax benefits, leading to outrage among the middle class, which makes up about 30 percent of India's 1.42 billion people.

Graphics artist Namdev Katkar said he would like the opposition to replace the alliance led by Modi's Bharatiya Janata Party, or BJP, in his state, Maharashtra, one of the four going to the polls. India's financial capital, Mumbai, is in Maharashtra.

"I will have to pay more taxes for my income and this is like losing our hard-earned money," said Katkar, who said he invests his savings in the stock market. "I am not yet sure whom to vote for but this time it will not be the BJP."

While any possible losses in the regional polls will not affect Modi's position as prime minister, they would raise questions about his leadership and reputation of invincibility after the BJP failed to clinch a majority in the general election to the lower house of parliament.

"If the BJP loses in the regional elections, it will impact his leadership quite adversely," said New Delhi-based political commentator Arati Jerath.

Regional votes are also important because they determine a party or alliance's strength in the upper house of parliament. The middle class, loosely defined in India as those earning between $6,000 and $36,000 a year, is generally not ideologically attached to any party but has favored the BJP because of its largely pro-business stance.

"This is hurting our pockets," said Kumud Ranjan, who runs a public relations firm in the eastern state of Jharkhand.

According to a poll by the CVoter survey agency, the budget was the most unpopular presented since Modi came to power in 2014, scoring 4 out of 10 from 2,000 respondents.

Political analysts say the middle class represents India's swing voters and along with local issues, rural distress and high unemployment, their anger could hurt the BJP's chances in the state elections.

Amitabh Tiwari, a political analyst and former investment banker, said however the middle class ire could be a millstone for the ruling party.

"The BJP has already paid the price," said Tiwari. "Its inability to reach the simple majority mark (in the general election) is largely attributed to the middle class and the rich. And it could worsen, the pace of fall could increase."

Agencies Via Xinhua