India Union Budget 2025-2026?
Finance Minister Nirmala Sitharaman is set to present the Union Budget for 2025-2026 on February 1, 2025. This budget is particularly significant as it marks the second budget of the Modi government’s third term and Sitharaman’s eighth consecutive budget presentation, including one interim budget.
Key Expectations and Proposals
Tax Reforms
Income Tax Changes: The government is considering making annual incomes up to ₹10 lakh tax-free or introducing a new 25% tax slab for incomes between ₹15 lakh and ₹20 lakh. Currently, income above ₹15 lakh is taxed at 30%.
Potential Revenue Impact: Implementing these tax reforms could lead to a revenue loss of approximately ₹50,000 crore to ₹1 lakh crore, aimed at stimulating urban consumption amid slowed GDP growth.
Economic Focus
The budget is expected to emphasize themes of ‘Amrit Kaal’ and ‘Viksit Bharat’, focusing on growth and development across various sectors.
There are calls for enhanced public spending, fiscal stability, and tax reforms to spur private investment and innovation.
Infrastructure and Investment
A strong emphasis on infrastructure spending is anticipated, with estimates suggesting India will need $2.2 trillion in investments to achieve its target of becoming a $7 trillion economy by 2030. This includes public-private partnerships in key sectors like ports and roads.
The government aims to balance ambitious infrastructure projects with fiscal discipline, particularly in light of a recent economic slowdown.
Sector-Specific Initiatives
The budget may include measures to support the semiconductor industry, building on previous allocations aimed at reducing reliance on imports and enhancing competitiveness in global supply chains.
Expectations also include initiatives for the consumer and retail sector, which is vital for job creation and economic growth, focusing on employment-linked incentive schemes and support for digital infrastructure.
Sustainability Goals
There is likely to be a push towards eco-friendly initiatives, particularly in renewable energy sectors such as solar power and electric vehicles (EVs). This includes potential subsidies for energy storage and modernization of electricity distribution companies (DISCOMs).
Overall, the Union Budget 2025-2026 is poised to set a strategic economic vision for India, addressing immediate fiscal challenges while laying groundwork for long-term growth through comprehensive reforms across multiple sectors.
