Budget 2025 Expectations : The Union Budget for February 1 is eagerly anticipated, marking the eighth consecutive budget presented by Finance Minister Nirmala Sitharaman. This budget is expected to include six major announcements, chosen based on three key factors: public needs, the BJP manifesto, and government and media reports.
Six Key Announcements Expected in This Budget:
1. Price Adjustments: Possible Reduction in Petrol and Diesel Prices
The government may cut excise duty on petrol and diesel, potentially lowering fuel prices. Currently, petrol carries a duty of INR 19.90 per liter, while diesel has INR 15.80 per liter.
- Import duties on consumer electronics components may be reduced from the current 20%, making products like mobile phones more affordable.
- Import duty on gold and silver, currently at 6%, may be increased, leading to higher prices for these commodities.
Reasons for These Announcements:
- The Confederation of Indian Industry (CII) has recommended excise duty cuts on fuel to ease economic pressures.
- Lower import duties on electronic components will reduce manufacturing costs, supporting the ‘Make in India’ initiative.
- The government had previously reduced import duty on gold from 15% to 6%, which led to a 104% surge in gold imports. To control trade deficits, the government may now reverse this trend.
2. Income Tax: Exemptions Up to INR 10 Lakh Annually
- Under the new tax regime, income up to INR 10 lakh may be tax-free.
- A new 25% tax bracket may be introduced for incomes between INR 15 lakh and INR 20 lakh. Currently, income above INR 15 lakh is taxed at 30%.
- The basic exemption limit under the new tax regime may increase from INR 3 lakh to INR 5 lakh.
Why This Matters:
- Analysts suggest the government wants more people to adopt the simplified new tax regime, which involves fewer documentation hassles compared to the old one.
3. Welfare Schemes: PM Kisan Samman Nidhi May Increase to INR 12,000
- The PM Kisan Samman Nidhi scheme, which currently provides INR 6,000 annually to farmers in three installments, may be doubled to INR 12,000.
- The scope of the Ayushman Bharat health scheme may be expanded to include more beneficiaries beyond economically weaker sections and senior citizens above 70 years.
- The Atal Pension Yojana (APY) may see an increase in the maximum pension amount from INR 5,000 to INR 10,000 per month.
Why These Changes:
- A parliamentary standing committee has recommended increasing the PM Kisan Samman Nidhi payments.
- The government aims to expand healthcare coverage.
- The Atal Pension Yojana, launched in 2015, has not seen significant updates in years.
4. Employment: Internship Programs for Rural Graduates
- A comprehensive ‘Integrated National Employment Policy’ may be introduced, consolidating various employment programs under one umbrella.
- Internships in government offices in rural areas may be announced, exclusively for graduates.
- An International Mobility Authority may be set up to assist Indian job seekers in finding opportunities abroad.
- Startups may receive additional support to boost skill development and job creation.
Why This Is Important:
- The CII has urged the government to introduce a unified employment policy.
- With an average age of 29 years, India has a young workforce requiring large-scale employment opportunities.
5. Healthcare: Roadmap for 75,000 Additional Medical Seats
- The healthcare budget may be increased by 10%, exceeding last year’s INR 90,958 crore allocation.
- Import duties on medical equipment like MRI machines, currently ranging from 7.5% to 10%, may be reduced.
- The government plans to add 75,000 new medical college seats over the next five years, and a roadmap for this expansion may be revealed in the budget.
Rationale for These Measures:
- Improving healthcare infrastructure requires higher budgetary allocations.
- Lowering customs duties on medical equipment will reduce treatment costs and make diagnostics more affordable.
- Prime Minister Narendra Modi has expressed a vision to make India a global education hub, requiring significant investments in medical education.
6. Affordable Housing: Raising the Price Limit for Subsidized Homes
- The price limit for affordable housing in metro cities may increase from INR 45 lakh to INR 70 lakh, allowing more buyers to benefit from government subsidies.
- In other cities, the limit may rise to INR 50 lakh.
- The tax exemption on home loan interest, currently capped at INR 2 lakh, may be increased to INR 5 lakh.
Why This Matters:
- India currently faces a shortage of 10.1 million affordable homes, which is projected to rise to 31.2 million by 2030.
- The real estate sector has requested higher tax exemptions on home loan interest to encourage homeownership.
With these anticipated announcements, Budget 2025 Expectations are set to focus on economic relief, employment generation, healthcare expansion, and affordable housing, aligning with the government’s long-term developmental goals.
