The Union Budget 2025, set to be presented by Finance Minister Nirmala Sitharaman on February 1, 2025, will mark her eighth consecutive budget presentation, surpassing Morarji Desai’s record. As the second full budget of Modi 3.0, this fiscal blueprint is expected to focus on income tax reforms, agriculture, job creation, electric vehicles, and digital innovation while balancing fiscal consolidation and economic growth.
Income Tax Reforms and Economic Growth
The government may phase out the old tax regime and introduce a zero-income tax slab for individuals earning up to ₹10 lakh annually. Such measures would boost disposable income and stimulate household consumption, a key driver of India’s GDP. Additionally, rationalizing GST on financial services and simplifying compliance frameworks for digital lending and fintech partnerships are anticipated.
Agriculture and Rural Development
Given the significance of the agricultural sector, increased budgetary allocations for rural infrastructure, irrigation projects, and subsidies on agri-tech innovations are likely. Policies aimed at supporting farmers through direct benefit transfers and enhanced minimum support prices (MSPs) may also be introduced.
Healthcare and Pharmaceuticals
Industry leaders anticipate incentives for domestic Active Pharmaceutical Ingredient (API) and biosimilar production to reduce import dependency. Strengthening public-private partnerships, enhancing regulatory frameworks, and investing in digital health initiatives like Ayushman Bharat Digital Mission (ABDM) are also on the agenda.
Employment and Labour Reforms
To boost job creation, the budget may focus on labor law reforms, skilling initiatives, and incentives for companies expanding their workforce. Simplifying labor codes is expected to enhance ease of doing business and encourage employment generation across key sectors.
Electric Vehicles and Sustainable Mobility
The EV industry expects increased investments in charging infrastructure and incentives for electric two-wheelers and commercial fleets. The government’s continued focus on green energy and sustainable mobility is expected to accelerate EV adoption across India.
IT, AI, and Digital Innovation
The IT sector, projected to reach $210 billion in exports by 2025, seeks tax incentives for Global Capability Centers (GCCs), easing business regulations, and promoting emerging technologies such as AI, blockchain, and quantum computing. Incentives for research and development in tech-driven sectors could accelerate innovation and job creation.
Real Estate and Urban Development
The real estate industry anticipates reduced home loan interest rates and increased tax deductions on housing loans. Policies supporting smart city infrastructure, green building practices, and streamlined project approvals could stimulate demand, especially in luxury and mid-income housing.
Infrastructure and Manufacturing Growth
With a focus on capital expenditure, the budget is expected to enhance investments in roads, railways, and renewable energy. Tax incentives for manufacturing, particularly in semiconductors and electronics, could align with India’s self-reliance goals.
Union Budget 2025 is poised to be a milestone in India’s economic trajectory, addressing income tax reforms, employment generation, and sectoral growth. The government’s ability to balance fiscal prudence with stimulus measures will be key to driving sustainable development and economic resilience.