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The hike will be financed by existing state resources plus a combination of regional aid, new investments, and efforts to unfreeze Syrian assets held abroad.
The upcoming budget may focus on the new income tax regime yet again to increase its appeal compared to the old tax regime.
Pranab Mukherjee's daughter, Sharmistha Mukherjee, expressed her gratitude to Prime Minister Narendra Modi for the decision, calling it a "gracious" and "unexpected" gesture.