Union Budget for fiscal year 2025-26 is scheduled to be brought by Finance Minister Nirmala Sitharaman on February 1, 2025. This highly anticipated event will begin at 11:00 am IST in the Lok Sabha. This is the eighth time Sitharaman has presented the federal budget and the second annual budget of the third Modi government.
People’s expectations are high, especially as the government and local authorities are waiting for more announcements. Among such proposals, the public is waiting for possible cuts in the income tax rates applicable to individual taxpayers who earn up to ₹15 lakh per year. If the move is to be effected, then middle-income earners will have a big sigh of relief, disposable income will rise, and there will be more spending.
Industry bodies have made similar calls as well. The reality is that the global economy is increasingly characterized by change, uncertainty, and complexity. Currently, the Chairman of the Confederation of Indian Industries (CII), Sanjiv Puri, has said, “To augment consumption, we have recommended that income tax should be slashed for those earning up to ₹20 lakh a year to increase disposable income and provide revenue stability.”
Further, the industry has appealed to the government to remove or at least lessen the excise duties on petroleum products, which, if undertaken, would boost disposable income, thereby, the economy as a whole. “If the excise on petroleum is to be reduced, it would enhance the Wheel of High Consumer Spending,” added Puri.
The EV segment is also looking for radical changes on similar lines, such as Providing infrastructure status to charging infrastructure for EVs and further pruning of performance-linked incentives targeting manufacturing of EVs domestically. These steps could help fast-forward the evolution of electric vehicles in India.
This is because capex is believed to remain the budget’s focal point even if it was slightly cut last year amid the 2024 general elections. As the GDP growth rate declines, enhancement of capex is considered crucial to address infrastructure challenges and stimulate growth.
So, the budget is on the horizon, and there is a focus on the government to respond to major economic issues and outline the course for India’s economic development.
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