With just days left until India’s Union Budget 2025, all eyes are on Finance Minister Nirmala Sitharaman as she prepares to present her eighth consecutive budget on February 1. Expectations are running high, with various sectors anticipating policy changes aimed at reinvigorated economic growth, especially as the nation grapples with rising challenges like inflation and slowing GDP growth.
The Union Budget is set to cover significant topics like taxation, digital economy stimulation, infrastructure investments, and several initiatives centered around women's empowerment—a focal point emphasized by experts and industry leaders alike.
Dr. Payal Kanodia, Chairperson of YFLO Delhi, expressed optimism about the role of women in driving economic development. She stated, "We expect our policymakers to prioritize women's empowerment as a key element for economic growth." Citing the potential for women driving entrepreneurship, she highlighted the need for supportive policy measures and financial independence initiatives. "Currently, women’s labour force participation in India stands at only 41.7%, below the global average of over 50%," Dr. Kanodia explained, reitering the expected 30% increase in GDP associated with greater female workforce engagement.
To support her claims, experts noted the Economic Survey 2024-25, scheduled for release on January 31, will provide insights on India’s economic performance over the past year, detailing key trends across agriculture, industry, and services. This pivotal document is prepared under the guidance of the Chief Economic Advisor, V Anantha Nageswaran, and will serve as both critique and guide for the budgetary process to follow.
The Economic Survey typically serves as an analytical framework, helping set realistic revenue and expenditure targets, with its release anticipated to shape government priorities amid macroeconomic shifts.
Currently, concerns are mounting over inflation remaining above the Reserve Bank of India’s comfort zone and the Indian rupee's instability against the US dollar. Analysts anticipate the budget will adopt measures to stimulate domestic consumption, particularly by targeting middle-income groups who have been financially strained amid rising costs.
Some industry voices, like the Institute of Chartered Accountants of India (ICAI), expressed hopes for tax reforms aimed at startups and smaller enterprises to allow simpler compliance and stimulate innovation-led growth. Sanjay Dighe, CEO of Krystal Integrated Services, also highlighted the need for supportive budgets focusing on green energy and sustainability within infrastructure development.
“With the upcoming Union Budget, we are optimistic about policies driving growth and innovation.” Dighe said, indicating the importance of bolstering energy-efficient solutions and smart technology to boost urban infrastructure.
Job creation has emerged as another area of focus. Employment-linked incentives remain on the table as experts believe aligning tax reforms with skill development and innovation could drive the economy forward. Recommendations have suggested increasing participation from startups, especially those focusing on digital solutions including artificial intelligence and cybersecurity.
The meeting of industry and social leaders coincides with discussions around the need for simplification of taxation, which would not only lift the burden but also encourage long-term investments toward fostering growth across various sectors, including the burgeoning logistics field, which has seen investments aimed at modernization and improved efficiency.
The real estate sector, too, calls for recognition as an industry, seeking favorable market conditions including reduced input costs and clarity around policies affecting housing, which remains pivotal for wider economic engagement. Calls to decrease GST on various construction materials highlight the necessity of making housing more accessible for all socio-economic segments.
Expectations are also ripe for the government to push forward plans around digital payments and infrastructure projects. Bank of Baroda's BOBCARD CEO Ravindra Rai indicated, "We look forward to decisive measures accelerating the adoption of digital payments and converting India to a global benchmark for security and inclusion within the digital economy."
The push for sustainability coupled with technological advancement will feature heavily, with expectations set for considerable investments aimed at bolstering India's tech-driven economy, particularly through innovation grants and incentives to local startups working within cutting-edge fields.
Reflecting on recent assessments, analysts maintain optimism around the upcoming budget’s potential to not only empower traditionally sidelined groups but also restore faith among consumers, enhancing financial capabilities and expectations from government policy.
Investors are closely monitoring the potential adjustments to personal income tax and the future of long-term capital gains taxation. Expectations for maintaining favorable tax conditions on equity investments could play a key role in the stock market, promoting steady retail inflows.
The interplay of these various expectations will culminate on February 1 when Minister Sitharaman steps forward to outline the 2025 Union Budget. Both industry and societal leaders are awaiting decisive measures to steer India through economic challenges toward sustained growth.