Ahead of India’s budget on February 1st, Narendra Modi asked Lakshmi, the Hindu goddess of wealth, to bless the poor and the middle class. The prime minister’s request for divine intervention mingled public spirit with political self-interest: frustration about economic growth and joblessness contributed to Mr Modi’s loss of his outright majority in elections held last year. As it turned out, the middle class, rather than the poor, ended up the real winners of the fiscal statement. Nirmala Sitharaman, Mr Modi’s finance minister, announced tax cuts that were worth around 1trn rupees annually ($12bn, or 0.3% of GDP), which was enough to exempt millions of relatively high-earning Indians from income tax altogether.
