The announcement came just before the Delhi polls where BJP is locked in a fierce contest against Arvind Kejriwal’s Aam Aadmi Party. Aimed to spur consumer sentiment in general, the tax sops offered were also being seen as an attempt to woo Delhi’s 40 lakh income tax-payers.

Canvassing for the BJP in R K Puram, a day before campaigning ends, Modi focused on the tax rebate for those earning up to Rs 12 lakh a year and the benefits of the 8th Pay Commission.

Banking on the Budget's tax relief, the BJP seeks to energise Delhi's middle class; the AAP is doing its bit too. But will their outreach mobilise this politically crucial yet disengaged electorate?

The government is trying to boost domestic demand among its vast middle class as food inflation dents disposable income.