Wed Jan 29 12:30:17 IST 2025: ## Union Budget 2025: Expectations High for Infrastructure, Tax Reliefs, and AI Investment

**New Delhi, January 27, 2025** – India eagerly awaits the Union Budget 2025, to be presented by Finance Minister Nirmala Sitharaman on February 1st. The budget, expected to prioritize fiscal prudence while boosting key sectors, will be unveiled following President Droupadi Murmu’s address to Parliament on January 31st. The Economic Survey will also be presented on the same day.

Economists and industry experts anticipate continued investment in infrastructure, particularly in railways, roads, and defence, although a major increase in overall capital expenditure is not foreseen. Significant focus is expected on measures to stimulate consumption and provide tax relief for salaried middle-class taxpayers. This includes potential increases in exemption and deduction limits under both the new and old income tax regimes, along with tax breaks for health and life insurance premiums and voluntary NPS contributions.

The budget is also poised to significantly impact India’s burgeoning AI sector. Experts predict substantial investment in AI research, particularly in indigenous large language models and AI chip development, alongside comprehensive skilling initiatives. Furthermore, policies focusing on AI applications in healthcare, agriculture, and education are anticipated.

Other key sectors are also looking for specific measures. The defence sector anticipates increased allocations for modernization and boosting self-reliance (“Aatmanirbharta”). The startup ecosystem hopes for investments in startups and angel funds to be included under Section 80C, mirroring the success of ELSS schemes for mutual funds. The paint industry expects measures to drive growth and sustainability, including reducing import duties and incentivizing exports. The real estate sector hopes for enhanced liquidity, boosted infrastructure funding, and clearer guidelines for REITs. Finally, the fintech sector anticipates continued support for digital payments, financial inclusion, and easier regulatory frameworks.

While economists project efforts to lower the fiscal deficit to around 4.3-4.4% of GDP for FY26, they also expect continued high capital expenditure, benefiting MSMEs and industry through schemes like the PLI. The budget’s impact on consumption remains to be seen, with speculation on potential income tax rebates. The Budget Session will run from January 31st to April 4th.

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