Nirmala Sitharaman will present the Union Budget 2025 in Parliament on February 1, 2025. Her speech will begin at 11 am in the Lok Sabha.
The Union Budget will be telecast on the official channels of Parliament, Doordarshan and Sansad TV, and streamed on the government’s official YouTube channels.
While India prepares its Union Budget 2025, it is expected to give significant attention to several key sectors to boost economic growth and address challenges.
Agriculture and rural development
Budget 2025,The government plans to increase the agriculture sector budget by about 15% to about $20 billion – the biggest increase in the last six years. The funding is aimed at boosting rural incomes, controlling inflation, and increasing the production of pulses, oilseeds, vegetables, and dairy products. Additionally, investments in high-yielding seed varieties, improved storage and supply infrastructure are expected to generate surpluses to boost agricultural exports to $80 billion by 2030.
Subsidies and Fiscal Measures
Budget 2025,To address higher food and energy costs, the budget is likely to increase spending on food, fertilizer and cooking gas subsidies by 8% in the next fiscal year, totaling $47.41 billion. Food subsidies are expected to increase by about 5% due to increased rice procurement and storage costs. The government also plans to allocate about Rs 250 billion for cooking gas subsidies, double the amount in the current fiscal year, while fertilizer subsidies have been retained at Rs 1.7 trillion.
Tax Reforms and Economic Stimulus
Budget 2025,Brokers predict that the government will focus on measures such as income tax cuts to stimulate economic growth. Consumer staples and agricultural input companies may benefit from promised schemes aimed at boosting rural incomes and an increase in the income tax exemption limit. Significant cuts in income taxes for individuals earning Rs 1 to 2 million annually are expected to boost consumer discretionary demand, which will have a positive impact on sectors such as consumer goods and the automotive industry.
Privatisation and state-owned enterprises
Budget 2025,In a strategic shift, the government is moving away from sweeping privatisation plans and is instead investing billions to revive several state-owned firms. This includes a $1.5 billion rescue package for two state-owned companies, including significant investment in helicopter operator Pawan Hans. Privatisation of at least nine additional state-owned units has been put on hold due to opposition from various ministries. The policy shift is partly driven by the hope that overhauled units can return to profitability and generate dividend income.
Infrastructure and manufacturing
Budget 2025 is expected to focus on strengthening India’s manufacturing capabilities by attracting foreign investment, offering competitive tax rates and simplifying export rules. It calls for introducing a production-linked incentive (PLI) scheme for research and development to attract foreign companies and establish India as a global manufacturing innovation hub. Simplifying the export process and providing incentives to exporting industries is also expected to strengthen India’s position in global manufacturing.
Digital Infrastructure and Technology
Investments in upgrading digital infrastructure, especially in tier-2 and tier-3 regions, are expected to be a priority. The government is urged to allocate significant resources to enhance digital transactions and ensure financial inclusion. Incentives for fintech innovations, such as AI-powered fraud detection and blockchain-powered payment systems, are considered crucial to ensure security and speed in the payments landscape.
Energy Transition and Sustainability
The budget presents an opportunity to accelerate India’s energy transition and strengthen its energy security. Subsidies for energy storage, smart grid technologies, and discom modernisation are critical for grid stability and efficient renewable energy integration. Policy measures to promote domestic oil and gas exploration and develop green hydrogen infrastructure can further enhance energy security and sustainability.