Finance Minister Nirmala Sitharaman is set to present her record eighth Union Budget today, with expectations soaring for relief in income tax rates to ease the burden of inflation.
The budget presentation comes after Prime Minister Narendra Modi invoked the blessings of Goddess Lakshmi, raising hopes for economic measures to benefit the middle and poorer classes.
"I pray to Goddess Lakshmi that the poor and the middle-class sections in the country are blessed by her," the PM said on Friday.
Sitharaman, accompanied by Minister of State Pankaj Chaudhary and senior finance ministry officials, gave the final touches to the Budget document at her office in North Block on Friday.
The Finance Ministry shared a glimpse of the preparatory meeting on X, stating: "Union Minister for Finance and Corporate Affairs Smt. @nsitharaman interacts with the Secretaries and the senior officials involved in the Budget making process @FinMinIndia while giving final touches to the Union Budget 2025-26 at her office in North Block, in New Delhi, today."
The Modi government's second full budget in its third term will be unveiled against the backdrop of significant geopolitical uncertainties and a slowing economic growth rate, which has hit a four-year low.
Adding to the challenges is the threat of tariffs from newly inaugurated US President Donald Trump, targeting countries like India.
Analysts and experts anticipate that the budget will include measures to rationalise taxes, boost exports, and ensure better implementation of capital spending plans.
Additionally, a clear roadmap for structural reforms is expected to be outlined to address the current economic challenges.
DK Srivastava, Chief Policy Advisor at EY India, shared his insights, stating, "As we navigate a challenging economic landscape, the upcoming budget must balance fiscal prudence with growth-oriented measures. Increasing capital expenditure and putting more disposable income in the hands of consumers, particularly urban consumers, will be pivotal to uplifting growth in domestic demand."
Key pre-budget developments:
1. Economic Survey highlights:
The Economic Survey presented by Sitharaman in Parliament projected India’s GDP growth at 6.3% to 6.8% for FY 2025-26. It noted that India's growth is moderating and more efforts are required to achieve the near 8% rate essential for the "Viksit Bharat" vision by 2047.
2. PM Modi’s remarks:
Expectations for the middle class soared after Prime Minister Modi stated: "I pray to Goddess Lakshmi that the poor and the middle-class sections in the country are blessed by her."
3. Geopolitical and economic backdrop:
The budget comes amid geopolitical uncertainties and a slowing growth rate, with global economic concerns exacerbated by tariff threats from US President Donald Trump.
4. Expert recommendations:
DK Srivastava, Chief Policy Advisor at EY India, told PTI: "As we navigate a challenging economic landscape, the upcoming budget must balance fiscal prudence with growth-oriented measures. Increasing capital expenditure and putting more disposable income in the hands of consumers, particularly urban consumers, will be pivotal to uplifting growth in domestic demand."
5. Karnataka’s concerns:
Karnataka Chief Minister Siddaramaiah urged the Centre to ensure 'just and proportional' resource distribution, criticising its alleged discriminatory approach. "Instead of treating states merely as revenue-generating units, the Centre must respond to their financial challenges with fairness and empathy," he stated.
6. NRI tax concerns:
Congress leader KC Venugopal flagged concerns over recent changes in the taxation of capital gains on real estate for NRIs, urging the finance minister to extend equal tax benefits.
7. Rahul Gandhi’s critique:
Leader of the Opposition Rahul Gandhi highlighted the lack of representation of Dalits, tribals, backward classes, and minorities in the budget-making process.
"Tomorrow you will see that the finance minister will go with a briefcase. A photo will come. You will not see a single Dalit, a tribal, a backward class person or a minority in the photo," he remarked.
8. Congress strategy:
The Congress Party convened a meeting at Sonia Gandhi’s 10 Janpath residence to plan its strategy, focusing on issues such as inflation, unemployment, and the alleged insult to B R Ambedkar.
9. Himachal Pradesh's hopes:
Himachal Chief Minister Sukhvinder Singh Sukhu expressed hopes for funding to establish an international-standard airport, urging the Union government to bear the cost entirely.
The nation awaits Sitharaman’s budget speech to see whether these expectations, ranging from tax relief to infrastructure investments, will be met.
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