New Delhi: With expectations high for measures to kickstart the Indian economy, the Indian government is preparing to introduce its 2025 budget on 1 February. The budget is also expected to come out with measures to generate employment, protect middle class through tax concessions and change tariffs so that domestic industries are protected from external pressures.
Buoyed by recent electoral victories in Maharashtra and Haryana, Prime Minister Narendra Modi’s government plans to portray the budget as a platform to demonstrate its focus on development and economic growth. As ET reported, the administration is trying to project a solid message of pushing for more progress.
Middle Class Tax Relief
A major focus of the budget talks has been possible tax breaks for the middle class. The new tax regime on individuals will be exempted by the government, which is also working on simplifying corporate taxes. The Tax Deducted at Source (TDS) process is also to be streamlined.
Now, people earning more than 15 lakh rupees per year pay 30% tax. We expect a fall in this rate to stimulate demand in urban areas. It can also trim tax slabs to take care of larger segment of the population.
The tools of capital, employment, and capital expenditure are used.
Another key item in the budget will be job creation. Based on the three proposed employment-linked incentive schemes in the July budget, the government may introduce huge measures. Moreover, it will place heavy focus on capital expenditure (Capex) so as to spur private investment and build industry confidence.
Tariffs and their influence on Foreign Investment
The government is even mulling tariff adjustments to protect domestic industries from cheap imports, particularly from China. At the same time, talks are also on to include a set of measures that could woo foreign investment in the budget.
Economic Outlook
For fiscal year 2024 2025, India’s GDP growth is expected to be 6.4 %, lower than the previous year’s 8.2 %. This gives the government the added focus on fast tracking economic growth, raising demand and getting in money.
This budget aims at lifting the entire country’s economy and to provide relief to big industry and common man.