The union budget 2025 is set to be announced on the 1st of February, by Finance Minister Nirmala Sitharaman, expectations are running high across various industries. Stakeholders from the real estate, tourism, and education industries anticipate subsidies, reforms, and financial relief boosting economic growth and employment. With India aiming for a growth rate above 7%, the government faces the challenge of balancing fiscal discipline with economic expansion.
Employment Creation, Economic Growth, and Manufacturing
Economists believe economic growth and employment generation are closely tied to the manufacturing sector. With the estimated GDP growth rate at 6.4% the lowest in four years the government is under pressure to incentivize manufacturing through tax breaks and investment incentives. There are speculations that corporate tax rates for new investors could be reduced to 15-18% from the existing 22% to encourage domestic production and attract foreign direct investment.
Steel Industry Seeks Green Subsidies
The steel industry, a key player in India’s infrastructure development, is calling for subsidies on green steel technologies. Indian Stainless Steel Development Association President Rajmani Krishnamurthy has urged the government to align industry goals with national carbon reduction targets by providing tax relief and incentives.
Tourism and Hospitality Expect Tax Cuts
The tourism industry, still recovering from the pandemic’s impact, is seeking financial relief. Experts believe reducing GST on hospitality services could encourage domestic and international tourism, boosting revenue and employment in the sector.
Relief Expected in Fuel Prices
The Confederation of Indian Industry (CII) has recommended a reduction in excise duty on petrol and diesel, which could ease inflation and lower transportation costs. If implemented, this move would benefit consumers and industries dependent on fuel, such as logistics and manufacturing.
Gold and Silver Import Duty May Rise
To curb rising imports and reduce the trade deficit, the government is reportedly considering increasing import duties on gold and silver. This decision follows a previous reduction in gold import duty from 15% to 6%, which led to a sharp rise in gold imports. A higher duty may increase gold prices but help stabilize the economy.
Affordable Housing and Real Estate Boost
A major announcement for the housing sector is expected, with a possible 12% increase in budget allocation for urban development. The government may introduce a housing voucher scheme and enhance home loan subsidies, making affordable housing accessible to the middle class. There is also speculation about increasing the home loan interest deduction limit from Rs 3 lakh to Rs 5 lakh.
Rural Focus: Agriculture and Kisan Credit Card Expansion
Rural development is likely to be a key focus, with increased funding for health, education, and employment schemes. The government may raise the Kisan Credit Card loan limit from Rs 3 lakh to Rs 5 lakh, benefiting over 7.4 crore farmers.
Tax Reforms: Relief for Salaried Class and Businesses
There is growing anticipation that the government will increase the standard deduction limit from Rs 50,000 to Rs 1 lakh and adjust income tax slabs to offer relief to middle-income groups. Salaried individuals earning up to Rs 20 lakh may see tax benefits, while new tax slabs could be introduced to stimulate spending and investment.
The Road Ahead
As India strives towards its ambitious goal of becoming a developed nation by 2047, Budget 2025 will be a defining moment. Whether it meets the high expectations or falls short, the budget will set the course for India’s economic trajectory in the years to come.
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