As the countdown to the Union Budget 2025 approaches, all eyes are on Finance Minister Nirmala Sitharaman, who will be presenting the budget on February 1, 2025. With various sectors voicing their concerns and expectations, here are the key points to watch out for in this year’s budget:
Fiscal Deficit and Debt Management
The Government of India is expected to meet its fiscal deficit target of 4.5% of GDP by FY26. Beyond that, attention will shift to managing the target debt ratio, a challenge requiring thoughtful policy measures and potentially strategic financial adjustments.
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Tax Reforms
Govt can bring significant change in the minimum tax slab from Rs 3 lakh to Rs 5 lakh under the new tax regime. Additionally, extending the 100% tax rebate to individuals earning up to Rs 10 lakh could offer considerable relief to taxpayers.
Simplified Tax System
India’s tax reforms are expected to streamline the process, making it easier for individuals to transition from the old tax regime to the new system. The goal is to reduce average tax rates, encourage compliance, and support economic growth, especially for the middle class.
Electric Mobility Focus
The electric vehicle sector is expecting long-term subsidies similar to the FAME scheme to stimulate growth. Additional measures may include financial support for EV manufacturing plants, facilitating India’s rise as a global leader in the electric mobility space through policy consistency and incentives.
Railway Infrastructure Investments
The Union Budget may increase gross budgetary support (GBS) to Indian Railways by 15-18%, boosting funds to around Rs 2.9 lakh crore to Rs 3 lakh crore. Additionally, new Vande Bharat trains and the expansion of the Amrit Bharat Station Yojana could modernize the railway network.
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Support for Senior Living
As India’s senior living market grows, the budget is expected to include measures to support the sector, including easier financing options, lower taxes, and other reforms. These measures aim to increase sector penetration and cater to the rising demand for senior housing units.
Market Reactions and Growth
Equity markets have historically performed well in the months following the Union Budget, with both the Sensex and Nifty showing positive returns. The 2025-26 Budget may drive similar market-friendly policies that stimulate growth and investor confidence.
The upcoming Union Budget 2025-26 holds the promise of strategic investments and reforms across various sectors, with a focus on infrastructure, tax relief, and driving economic growth.
Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.
