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Shaping India's growth trajectory
Finance Minister Nirmala Sitharaman is set to present her eighth consecutive Budget on 1 February 2025. This Budget is expected to be crucial in shaping the country's economic agenda, guiding fiscal policies, and determining the allocation of resources across various sectors. The Government's vision for a strong and resilient economy is likely to shape the Budget's provisions and initiatives, with a focus on driving economic growth, generating employment, and fostering innovation.
“With the rupee depreciating and geopolitical challenges accentuating supply-side risks, inflation will remain a challenge. Fiscal policy must take the lead in stimulating growth without blowing the fiscal deficit out of control. Policies need to focus on achieving GDP growth north of 8.5% while incentivising private sector investments through public-private partnerships in areas like infrastructure, MSMEs, R&D, climate, ESG, and agriculture. Incentives such as subsidies, credit guarantees, refinancing, and tax breaks could be explored. Foreign capital will also be critical for addressing currency volatility and building FX reserves.”
"As the Government is aspiring to have “Insurance for all by 2047”, GST relief on protection products namely term life and health insurance will make the products more affordable for the end consumer thereby helping to increase penetration."
"The outlays for MSME programs, amounting to less than INR 10,000 crore, are disproportionately low compared to allocations for agriculture. There is a need to enhance outlays under the listed programmes such as micro & small enterprises cluster development programme (MSE-CDP) and raising and accelerating MSME performance (RAMP) programme."
“The forthcoming budget in India is anticipated to unveil the new Direct Tax Code 2025, a development that has generated considerable interest and discussion. Some of the key changes likely to be introduced in the direct tax code includes—Streamlining tax filing by reducing the number of sections and incorporating more schedules, simplifying taxpayer classification to residents and non-residents, eliminating categories such as ROR and RNOR., eliminating most deductions and exemptions to close loopholes and ensure a fairer tax system, expanding the scope of Tax Deducted and Collected at Source (TDS/TCS) to cover almost all income types, promoting regular tax payments and reducing evasion, taxing capital gains as regular income, which may result in higher taxes for some but ensures equal treatment of all income types, abolishing the concepts of “Assessment Year” and “Previous Year”, using only the “Financial Year” for tax filing, renaming income categories for clarity, with “Income from Salary” becoming “Employment Income” and “Income from Other Sources” becoming “Income from Residuary Sources."
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