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Budget 2025 Expectations: The Union Budget 2025-26 is set to be presented on February 1, 2025. Check Top Demands Here
Finance Minister Nirmala Sitharaman. (File Photo)
Budget 2025 Expectations India: As the countdown to the Union Budget 2025-26 begins, expectations are building across industries and sectors. Representatives from various industry bodies have submitted their suggestions to Finance Minister Nirmala Sitharaman during pre-Budget consultations. The Finance Minister, accompanied by key officials including the finance secretary, chief economic adviser, and other departmental secretaries, received a comprehensive set of recommendations aimed at bolstering economic growth while addressing inflationary and structural challenges.
Budget 2025 Expectations India: Key Recommendations from Industry Bodies
Reduction in Personal Income Tax Rates:
Industry representatives, including CII President Sanjiv Puri, have called for lowering personal income tax rates, particularly for individuals earning up to Rs 20 lakh per annum. The proposed measure aims to boost disposable incomes, drive consumption, and create a virtuous cycle of economic growth and revenue generation.
FICCI Vice President Vijay Sankar emphasised the need for relief to the middle class, which has been grappling with inflation and rising living costs. PHDCCI President Hemant Jain also highlighted the potential of increased disposable income to spur demand and reduce inflationary pressures.
Reduction in Excise Duty on Fuel:
CII has strongly advocated for a reduction in excise duties on petrol and diesel, pointing out that central excise accounts for a significant portion of retail fuel prices. With global crude oil prices having dropped by approximately 40% since May 2022, industry leaders argue that lowering excise duty could reduce inflation, enhance disposable income, and stimulate consumption, especially among lower-income households.
Support for Employment-Intensive Sectors:
Proposals included targeted measures for sectors with high employment potential, such as garments, footwear, tourism, furniture, and MSMEs. The focus is on boosting these sectors to create more jobs and integrate India into global value chains.
Rural Consumption and Food Security:
CII Director General Chandrajit Banerjee underscored the importance of addressing rural consumption trends, which have shown signs of recovery in recent quarters. Suggestions included raising daily wages under MGNREGS from Rs 267 to Rs 375, increasing PM-KISAN payouts from Rs 6,000 to Rs 8,000 annually, and introducing consumption vouchers for low-income households. These measures aim to enhance purchasing power and stimulate demand in rural areas.
Addressing Dumping by China:
A recurring concern across industry discussions was the global dumping of excess stock by China, particularly in India. This has impacted domestic industries and contributed to economic uncertainty. Industry bodies have urged the government to implement protective measures to safeguard local businesses and ensure fair competition.
Broader Economic and Structural Challenges
CII and other bodies have stressed the importance of tackling inflation, improving credit flow to MSMEs, and simplifying tax procedures, including GST and TDS. The focus is also on addressing climate change’s impact on food security and inflation. Suggestions to expand fiscal support for renewable energy projects and sustainable practices were also raised.
Real Estate Sector’s Expectations
The real estate sector, valued at over $300 billion, is keenly eyeing the Budget for supportive measures. Having experienced a mixed year in 2024, the sector faced a 4% drop in housing sales, attributed to rising prices, elevated borrowing costs, and supply constraints.
Affordable Housing Push:
Developers are seeking an increase in the deduction limit of interest on home loans to boost demand in affordable and mid-income housing segments. Additionally, industry leaders have called for a redefinition of affordable housing, along with expanded 80C benefits and interest rate reductions.
Stalled Projects and Consumer Trust:
Positive developments in resolving old stalled projects, such as Jaypee Infratech and Supertech Ltd, have rekindled hope among homebuyers. However, unresolved issues with projects like Unitech Ltd highlight the need for stronger policy interventions to address consumer grievances.
Luxury and Commercial Real Estate Growth:
The luxury housing segment continued its upward trend, with major launches such as DLF’s ‘The Dahlias’ project. On the commercial front, office space leasing reached record levels, driven by foreign companies establishing Global Capability Centres (GCCs) in India and the growth of managed office spaces.
Looking Ahead
The Union Budget 2025-26 comes at a time of both domestic resilience and global uncertainty. Industry leaders are optimistic about government interventions that will address structural issues, enhance disposable incomes, and provide targeted support to critical sectors. By fostering economic momentum and addressing key challenges, the Budget has the potential to set the stage for robust and inclusive growth in the coming fiscal year.
Union Budget 2025 Date
The Union Budget 2025-26 is set to be presented on February 1, 2025.
