KKN Gurugram Desk | As Finance Minister Nirmala Sitharaman gears up to present her eighth consecutive Union Budget today, expectations run high for measures aimed at alleviating the financial burden on India’s middle class, while maintaining fiscal prudence. This historic budget presentation comes at a critical juncture, with the nation grappling with high inflation and stagnant wage growth.
Economic Growth Projections for 2025-26
According to the Economic Survey 2025, India’s GDP is projected to grow between 6.3% and 6.8% in the fiscal year 2025-26. This positive outlook is attributed to anticipated increases in investment activities and the implementation of structural reforms. However, to sustain this momentum, the nation must focus on deregulation and other medium-term growth strategies.
President Droupadi Murmu’s Address
Ahead of the Budget presentation, President Droupadi Murmu addressed a joint session of Parliament, emphasizing the government’s dedication to pulling the economy out of a prolonged phase of policy paralysis. Highlighting the resilience shown during the COVID-19 pandemic and amidst global uncertainties, Murmu expressed confidence in the government’s ability to drive growth and stability.
Legislative Agenda: 16 New Bills
The Budget Session is set to be a busy one, with sixteen bills slated for introduction. Key among them are:
- Finance Bill 2025
- Amendments to the Waqf Act and Banking Regulations Act
- The merging of the Indian Railways and Indian Railways Board Acts
These legislative measures aim to streamline governance and improve operational efficiency across critical sectors.
Evolution of the Union Budget: From English to Hindi
The Union Budget has evolved significantly since its inception in 1860. Initially presented in English, the budget was printed in Hindi post-independence to make it accessible to a broader audience. This shift underscores the government’s commitment to transparency and inclusiveness.
Merging of Railway and Union Budgets
The tradition of presenting a separate Railway Budget was discontinued in 2017, merging it with the Union Budget—a move aimed at facilitating more integrated transport planning across highways, railways, and waterways. This integration allows for better resource allocation and fiscal management.
Impact of the Budget on the Indian Rupee
The Union Budget has far-reaching implications for the Indian Rupee’s stability. Key factors include:
- Fiscal Deficit: A higher deficit could weaken the rupee due to increased government borrowing.
- Tax Policies: Changes in tax policies can impact foreign investments and, consequently, the rupee’s value.
- Import Duties: Adjustments in import duties influence the demand for foreign currencies, affecting the rupee’s strength.
New Income Tax Regime: What’s in Store?
While the Direct Tax Code (DTC) will not be part of the Union Budget 2025, there’s speculation about simplification in the current Income Tax Act. Finance Minister Nirmala Sitharaman aims to reduce the complexity of tax laws, potentially making compliance easier for individual taxpayers.
Expectations from the Startup Ecosystem
The Indian startup community is closely watching the Budget, hoping for:
- Simplified tax regimes
- Ease of doing business initiatives
- Enhanced support for emerging technologies and infrastructure development
These measures could foster innovation and growth within the startup ecosystem.
Non-Tax Revenue Streams for the Government
Beyond traditional tax avenues like Income Tax and GST, the government relies on various non-tax revenue sources, including:
- Earnings from government-owned enterprises
- Interest on loans provided to states
- Royalties from natural resources
- Dividends from public sector investments
Understanding these streams is crucial as they contribute significantly to the nation’s fiscal health.
Budget At A Glance: Understanding Fiscal Priorities
The Budget at a Glance document provides a concise overview of the government’s fiscal plans. It highlights allocations across critical sectors like education, healthcare, and infrastructure, offering insights into the government’s spending priorities and revenue expectations.
President’s Approval and the Role of Parliament
The Union Budget 2025-26 has received the President’s nod, signaling the start of parliamentary discussions and deliberations. This year’s budget is not only a financial statement but also a roadmap for India’s economic future.
Focus on AI and Technological Advancement
Experts anticipate that the Budget 2025 will emphasize AI-driven initiatives, building on previous investments through the IndiaAI Mission. With a proposed allocation of Rs 10.4k crore, this initiative aims to enhance AI computing capacity, fostering research and innovation.
Stock Market Reactions and Investor Sentiment
The Indian stock markets, represented by indices like Sensex and Nifty, are trading cautiously as investors await the budget announcement. Historical data shows that budgetary announcements significantly impact market sentiment, influencing both domestic and foreign investments.
ICAI’s Proposal for Joint Tax Filing
The Institute of Chartered Accountants of India (ICAI) has proposed joint tax filing for married couples, which could simplify tax compliance and reduce the overall tax burden. This proposal aligns with global practices seen in countries like the United States and the United Kingdom.
Education Sector: Expectations and Allocations
The education sector is looking forward to increased allocations for teacher training, STEM labs, and digital infrastructure. With previous budgets emphasizing digital education, stakeholders hope for continued support in modernizing India’s educational landscape.
Inflation Control and Fiscal Discipline
Addressing inflation remains a top priority, with the Reserve Bank of India (RBI) aiming to maintain the inflation rate within its 2-6% tolerance range. Fiscal discipline and strategic public spending will be key to achieving this objective.
As Finance Minister Nirmala Sitharaman prepares to unveil the Union Budget 2025, the focus will be on balancing growth with fiscal discipline. The budget is expected to introduce reforms that not only boost economic growth but also ensure financial stability and equitable development.
Stay tuned to KKNLive.com for detailed analyses and live updates on the Union Budget 2025.