Thu Jan 30 03:29:18 IST 2025: ## India Awaits Budget 2025: Focus on Growth Amidst Economic Challenges

**New Delhi, January 28, 2025** – As India gears up for the presentation of Union Budget 2025 on February 1st, expectations are high for policies that will bolster economic growth across key sectors. Finance Minister Nirmala Sitharaman will unveil her eighth budget against a backdrop of sluggish domestic demand, currency depreciation risks, and potential trade challenges.

While a significant increase in overall capital expenditure is unlikely, the government is anticipated to continue substantial investment in core infrastructure, including railways, roads, and defense. Economists predict a continued focus on fiscal prudence alongside targeted growth-supportive measures. Nomura, for example, expects fiscal consolidation to continue (4.8% of GDP in FY25, 4.4% in FY26).

**Key Expectations:**

* **Tax Reforms:** Simplification of the tax process, enhanced tax relief, and increased transparency are anticipated, particularly concerning GST regulations. Industry experts advocate for consolidating GST tax brackets, establishing a unified authority for cross-jurisdictional issues, and streamlining refund processes. Suggestions include expanding input tax credits and potentially increasing the standard deduction for individual taxpayers. Debate continues regarding the potential for changes to income tax slabs and rates to boost consumption, although the government’s fiscal deficit targets may limit the scope for significant adjustments. There’s also discussion around making the new tax regime the only option.

* **Boosting Key Sectors:** Significant focus is expected on agriculture, MSMEs, and emerging technologies. The agrochemical industry seeks GST reduction on their products to improve affordability for farmers and encourage local manufacturing through PLI schemes. The government’s commitment to AI, evidenced by the Rs 10,300 crore allocation for the India AI Mission in 2024, is expected to continue, with calls for increased R&D investment and support for startups. The semiconductor industry also looks for continued government support. The EV sector anticipates continued government support for infrastructure development.

* **Addressing Economic Slowdown:** With Q3 earnings showing less-than-expected festive sales and recent economic indicators pointing to slower growth in manufacturing and services, the budget is under pressure to stimulate consumption. Measures to increase disposable income for the middle class are highly anticipated.

The Economic Survey will be presented on January 31st, preceding the President’s address to Parliament on the same day. The Budget Session will conclude on April 4th. While the government aims for a fiscal deficit reduction to 4.5% of GDP in 2025-26 from 4.9% in 2024-25, the degree to which these expectations will be met remains to be seen.

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