India’s 2025 Budget aims to boost economic growth while maintaining fiscal discipline. Key priorities include tax relief, infrastructure investment, job creation, and export incentives.
The Budget for the fiscal year starting April 1 aims to boost economic growth while maintaining fiscal prudence. A revision in income tax rates, particularly for the middle class, is widely expected in Finance Minister Nirmala Sitharaman’s eighth consecutive Budget.
With slowing economic growth and global uncertainties, including potential U.S. tariffs under President Donald Trump, the government is expected to focus on:
- Tax relief for the lower middle class.
- Boosting consumption and private demand.
- Expanding production-linked incentives and welfare schemes.
- Increasing capital expenditure in infrastructure and manufacturing.
- Lowering tariffs to encourage local production.
- Enhancing job creation and skill development.
Analysts believe fiscal consolidation will continue, targeting a fiscal deficit of 4.5% of GDP in FY26, down from 4.8% in FY25.
Economists expect government spending to increase post-elections, supporting growth. Measures may include:
- Incentives for agriculture and manufacturing.
- Tariff rationalization and duty exemptions to boost exports.
- Simplifying export compliance procedures.
EY expects at least a 20% rise in capital expenditure to drive economic activity, especially in manufacturing and infrastructure.
Despite challenges like a weak rupee and global headwinds, the government is likely to stick to macro stability and fiscal discipline, focusing on medium-term economic growth rather than short-term populist measures.
The budget will also prioritize employment generation, private sector involvement, and structural reforms to sustain India’s economic momentum.
