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While presenting the last Budget 2024-25, FM Nirmala Sitharaman mentioned nine priorities as part of the roadmap for the pursuit of ‘Viksit Bharat’ and had said “subsequent budgets will build on that”; here’s what we expect from the upcoming Budget from her last year’s Budget…Read More
Finance Minister Nirmala Sitharaman is set to present her eighth budget 2025-26 on Saturday, February 1.
Budget 2025 Expectations: Finance Minister Nirmala Sitharaman is set to present her eighth Budget 2025-26 on Saturday. The budget will be closely watched as it comes at a time when the country’s economy is slowing and the consumption is subdued. In the last Budget 2024-25, FM Sitharaman had laid down a roadmap for ‘Viksit Bharat’ and announced various initiatives to have impact on subsequent budgets. Here’s what we expect from the Union Budget 2025-26 based on FM Nirmala Sitharaman’s last Budget Speech 2024-25.
While presenting the last Budget 2024-25, Finance Minister Nirmala Sitharaman had announced nine priorities as part of the roadmap for the pursuit of ‘Viksit Bharat’ and had said “subsequent budgets will build on that”.
The ‘Nine Priorities’ For ‘Viksit Bharat’ & Subsequent Budgets
The nine priorities are ‘productivity and resilience in agriculture’, ’employment & skilling’, ‘inclusive human resource development and social justice’, ‘manufacturing & services’, ‘urban development’, ‘energy security’, ‘infrastructure’, ‘innovation, research & development’, and ‘next generation reforms’.
“Subsequent budgets will build on these, and add more priorities and actions,” Sitharaman had said this on July 23, 2024, while presenting the last Budget 2024.
So, it will be a key area to watch out for in the upcoming Budget on Saturday.
Job Schemes Over Five Years
As part of the ‘Budget Theme’ also, she had said, “I am happy to announce the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of Rs 2 lakh crore.”
It will be important to watch out for subsequent measures to push employment in the country.
Customs Duty Structure
In the last Budget Speech 2024, Sitharam announced customs rate cuts on some items, including mobile phones, charger and some cancer drugs. Apart from this, she had also proposed to comprehensively review the customs duty structure within six months.
“In Budget 2022-23, we reduced the number of customs duty rates. I propose to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes,” she had said on July 23, 2024.
So, a revamp of the customs duty structure is highly expected during this year’s budget 2025 on February 1, 2025.
Income Tax Act Review
While incentiving the new income tax regime by raising the standard deduction limit from Rs 50,000 to Rs 75,000 and increasing the income tax rebate limit from Rs 5 lakh to Rs 7 lakh, FM Nirmala Sitharaman in the last Budget 2024-25 had also proposed to comprehensively review the income tax Act in the next six months.
According to reports, the government is now likely to bring the new income tax bill in the budget session of Parliament.
So, any relaxation or announcement on the income tax front will be keenly watched, especially at a time where there are increased demands on relaxing tax burden on individuals to boost consumption in the economy.
Fiscal Consolidation Path
The previous Budget had pegged the fiscal deficit at 4.9 per cent of GDP for the current fiscal 2024-25. FM Sitharaman had vowed to keep it “below 4.5 per cent next year”.
“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year. The Government is committed to staying the course. From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as percentage of GDP,” she added.
Though economists and analysts seek tax relaxations irrespective of the impact on fiscal deficit target this year, it will still be watched by market participants for future assessments.
So, the upcoming Budget 2025 is going to be closely watched as it comes at a time when the country’s economic growth is slowing and the private consumption is subdued. All eyes will be on the finance minister’s announcements to boost the economic activity in the country.
