?? What to Expect from Union Budget 2025: Key Focus Areas & Expectations

?? Introduction:

The Union Budget for 2025, scheduled to be presented on Saturday, 1st February 2025, will play a crucial role in shaping the country’s ?? economic growth trajectory. As the ??? government strategizes for the upcoming fiscal year, all ?? are on the policy measures and ?? fiscal allocations that will be introduced. While the specifics of the budget remain undisclosed, ?? experts and analysts are already speculating on key areas that could dominate discussions and drive economic policies.

?? Economic Context:

India is navigating a complex post-pandemic recovery landscape, where ?? fiscal discipline remains a significant challenge. In 2024, India's GDP growth rate is projected to be around 6.5%, a moderate but steady expansion compared to previous years. Inflation remains a concern, averaging around 5.4% in 2024, which calls for strategic ?? fiscal policies to ensure price stability while fostering ?? economic growth.

The Union Budget 2024-25 had an estimated expenditure of ?45.03 lakh crore, with a fiscal deficit target of 5.9% of GDP. For 2025, analysts anticipate a fiscal deficit reduction to around 5.5% of GDP, signalling a path toward ?? economic consolidation while maintaining growth momentum. The ??? government’s tax revenue, which was projected at ?26.32 lakh crore in 2024, could see a 10-12% ?? rise in 2025 due to improved compliance and ?? economic activity.

?? Key Areas of Focus for the Budget:

1?? ?? Agriculture & Rural Development:

Rural distress remains a significant concern, with erratic monsoons and ?? input costs affecting farmers' income. The ??? government is likely to increase allocations for farmer welfare schemes such as PM-KISAN, which had a budgetary allocation of ?60,000 crore in 2024.

2?? ??? Infrastructure Investment:

The ??? government has been aggressively focusing on ??? infrastructure development as a means to spur ?? economic growth. Capital expenditure in the 2024 Budget was raised to ?10 lakh crore, a 33% increase from the previous year. For 2025, analysts predict another 15-20% ?? increase in capital spending, with enhanced outlays for ?? railways, ??? smart cities, and urban transport projects.

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3?? ?? Taxation Reforms:

Taxpayers and businesses anticipate potential tax relief measures, with discussions surrounding income tax slab revisions and GST rate rationalization. The previous budget provided marginal relief to salaried individuals under the new tax regime, and for 2025, further simplifications and reductions in personal ?? income tax rates could be on the cards.

4?? ?? Green Energy & Sustainability:

India has committed to achieving net-zero emissions by 2070, and the Budget 2025 could take concrete steps in this direction. The renewable energy sector received ?35,000 crore in the last budget, and this year’s allocation might cross ?40,000 crore, with significant investments in ?? solar energy, green hydrogen, and electric mobility.

?? Key Expectations:

?? Direct Tax:

1)??? Higher Basic Exemption Limit: The ??? government may increase the tax exemption threshold under the concessional tax regime from ?3 lakh to ?5 lakh, benefiting middle-income taxpayers.

2)??? Revised Tax Rates: A new 25% tax slab for incomes between ?15-18 lakh could simplify taxation.

3)??? Standard Deduction Increase: Salaried employees may see a rise from ?50,000 to ?75,000 to offset rising inflation.

4)??? NPS Benefits Expansion: Possible extended deductions for National Pension System (NPS) contributions to boost retirement savings.

5)??? Capital Gains Tax Reform: ?? Uniform taxation across asset classes & reduction in holding periods could simplify the tax structure.

?? Indirect Tax (GST):

1)??? Lower GST on Essentials: Healthcare, insurance, and daily-use goods could see reduced GST rates.

2)??? Natural Gas Under GST: ?? Streamlining energy taxation by including natural gas under GST.

3)???? Simplified GST Compliance: Reduction in procedural complexities & easier ITC (Input Tax Credit) rules to improve business efficiency.

4)???? Sin Tax Review: Possible reassessment of high GST rates on tobacco & aerated drinks to curb illicit trade.

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?? Final Thoughts:

With the ?? economic recovery still in progress, the ???? Union Budget 2025 will need to strike a fine balance between ?? fiscal prudence and ?? economic stimulus. By focusing on key sectors like agriculture, ??? infrastructure, and social welfare, the ??? government can lay the foundation for a more resilient and sustainable future. The upcoming budget will not only aim to strengthen India's domestic ?? economy but also position it as a global growth driver in the post-pandemic world.