Finance Minister Nirmala Sitharaman will table the Union Budget 2025 today, her eighth in a row. The Budget for the fiscal year starting April 1 will be closely followed for its measures to shore up the weakening economic growth. Another keenly-watched announcement would be revisions in the income tax as the middle-class population eagerly awaits any possible decreases.
Prime Minister Narendra Modi’s address on the first day of the Budget 2025 session has also triggered speculation on his government’s key policy priorities during the presentation of Budget on February 1. The PM’s speech highlighting the middle class, women and the poor gave rise to hopes of a budget focused on economic relief, tax adjustments and expanded welfare programmes.
“I pray to Goddess Lakshmi to shower blessings on the poor and middle class,” said Modi, fueling expectations of a populist tilt in the upcoming budget. His emphasis on “inclusion, investment, and innovation” suggests the possibility of measures addressing inflation, tax reforms and women-centric initiatives.
As inflation and stagnant tax relief continue to squeeze India’s middle class, Budget 2025 may introduce strategies to alleviate financial pressure. Experts predict potential changes to income tax slabs and an increase in food subsidies to provide some relief.
Follow all Union Budget 2025 updates and developments here:
Union Budget 2025: Expectations from the Budget?
Karnataka Minister Priyank Kharge said that he has no expectation from this budget. “We have seen over 10 years of Modiji’s masterstroke, ‘Modinomics’. And what has that led to? Highest unemployment, closure of SMEs and MSMEs, farmers protesting right at the doorstep of the parliament, start-ups have failed to take up, Make in India, Skill India and Digital India, all have remained on paper and just mere slogans. What is the FDI right now, zero, just last month, more than $9 billion were withdrawn…”
Budget 2025: FM Nirmala Sitharaman’s team
FM Nirmala Sitharaman will present her eighth budget today. Her team:
- CEA: V Anantha Nageswaran
- Secretary, Finance & Revenue: Tuhin Kanta Pandey
- Secretary, DEA: Ajay Seth
- Secretary, Expenditure : Manoj Govil
- Secretary, DIPAM, DPE: Arunish Chawla
- Chairman, CBDT: Ravi Agarwal
- Chairman, CBIC: Sanjay Kumar Agarwal
- Secretary, DFS: Nagaraju Maddirala
Union Budget 2025: What Karnataka wants
Karnataka CM Siddaramaiah has demanded a host of measures from FM Sitharaman:
- Release Rs 5,495 crore special grant recommended by the 15th Finance Commission
- Release Rs 6,000 crore state-specific grant recommended by the commission
- Abolish cess and surcharge and merge them into divisible tax pool
- Amendment in the Constitution to raise the upper limit of Professional Tax
- Revision of the Special Capital Assistance Scheme, per which Karnataka gets a lower share of tax devolution
- Ayushman Bharat to be extended to all National Food Security Act (NFSA)-eligible families
- Release Rs 2,461 crore owed by the Centre to the state under MSP
- Fair compensation from the National Disaster Response Fund (NDRF) and the State Disaster Response Fund (SDRF)
- Approval for various projects, including those related to railways and the Mekedatu project
- Rs 10,000 crore special grant for five years for the comprehensive development of the Western Ghats region
Union Budget 2025: The minds behind the Budget 2025-26
Union Budget 2025-26: How will India tackle Trump’s tariffs?
To tackle Donald Trump’s tariffs, the government is looking to proactively reduce tariffs on certain goods. As per a Reuters report India is considering offering additional incentives to US companies. These incentives may include tax reductions and easier access to land, particularly for industries like semiconductors and electronics.
PM Modi is anticipated to discuss these matters with President Trump later in February. India aims to capitalize on US-China trade tensions to enhance its participation in global supply chains. The list of goods for tariff reduction is expected to encompass components essential for mobile phone assembly. These may include printed circuit board assemblies, parts of camera modules, and USB cables, according to sources.
Union Budget 2025-26: Any changes in tariffs amid Donald Trump’s demand to BRICS nations?
Irrespective of Donald Trump’s ultimatum to BRICS nation, which includes India, there is a likelihood of change in measures to enhance competitiveness of Indian products on a global stage. “Following the US elections, the risk of volatility in global trade has increased, with potential measures, such as higher import tariffs and tax cuts to promote manufacturing in the US,” said Rumki Majumdar, Economist, Deloitte India. The measures might include tariff rationalisation, duty exemptions and remission schemes, which would help lower the cost of Indian exports. Government could also look into simplifying export compliance procedures.
Revisiting tariff structures to support domestic manufacturing and reduce dependency on imports while helping manage exchange rate pressures are likely, said DK Srivastava, Chief Policy Advisor, EY India.
Union Budget 2025: What experts expect
Analysts and experts expect the following from Nirmala Sitharaman’s Budget 2025:
- Tax rationalisation
- Export push
- Better implementation of capital spending plans
- Roadmap on structural reforms
- Expansion of production-linked incentives (PLI)
- Increased allocation to welfare schemes
- Infrastructure upgradation
- Tariff cuts
- Increased allocation to boost job creation and skills
- Lower custom duties
- Increase in agricultural investment
- Measures to boost domestic demand and private consumption
Economic Survey 2024-25: India’s road to Viksit Bharat
To achieve its aspirations of becoming a ‘Viksit Bharat’ by 2047, India would need to see a much higher GDP growth rate — 8 per cent for a decade or two — than the projected figures for FY26, the Economic Survey said.
The survey said that there are many upsides to domestic investment, output growth and disinflation in FY26, but there are equally strong, prominently extraneous downsides too. ”Nonetheless, the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption,” it said.
Economic Survey 2024-25: Food inflation
Food inflation has been a significant contributor to rising prices in recent years, causing many to reconsider their spending on certain food items. However, the Economic Survey predicts that the situation should improve by Q4 FY25, as vegetable prices ease seasonally and the Kharif harvest comes in.
Economic Survey 2024-25: GDP estimates
The survey suggested that India’s GDP growth for FY26 would likely range between 6.3% and 6.8%, slightly higher than the estimated 6.4% growth for FY25. Despite global uncertainties and potential commodity price shocks, the survey expressed optimism that India’s economy is on the path to recovery.