Budget 2025 Expectations: Key Focus on Tax Reforms, Infrastructure, and Economic Growth

With the presentation of Union Budget 2025 fast approaching, all eyes are on Finance Minister Nirmala Sitharaman, who will present her eighth consecutive budget in the Lok Sabha on February 1. Industry stakeholders and experts are eager to see a range of measures, particularly focused on tax reforms, rationalization of GST rates, and substantial infrastructure allocation, all designed to stimulate consumption while maintaining fiscal discipline.

Over the past few years, the government has made a conscious effort to make the new tax regime more attractive, adjusting the income slabs and tax rates to increase its appeal. This trend continued in the 2023 Budget and the 2024 interim Budget. According to KPMG, this shift has yielded positive results, with 72% of taxpayers opting for the new tax regime in FY 2023-24, compared to just 28% choosing the old tax structure.

However, KPMG notes that while taxpayers are hopeful for more disposable income, the realistic expectation is that the income slabs and tax rates under the old tax regime may remain unchanged, with only minimal adjustments, if any, to the new tax regime.

In a recent announcement, Parliamentary Affairs Minister Kiren Rijiju revealed that the Budget Session will run from January 31 to April 4, 2025. He also confirmed that President Droupadi Murmu will address a joint session of both Houses of Parliament on January 31.

As the Budget presentation date draws nearer, the key focus areas for Budget 2025 are likely to include boosting government capital expenditure (capex), stimulating domestic demand, and driving growth in exports. Economic factors such as GDP growth, inflation control, skill development, and fiscal deficit management are expected to feature prominently in the budgetary proposals.

Tax experts, businesses, and taxpayers are all keen to see whether Finance Minister Sitharaman will introduce higher deductions or revise tax exemption limits to ease the financial burden on the common man.

On a ceremonial note, the traditional Halwa ceremony, marking the final stage of the Union Budget preparation, is scheduled to take place at the Central Secretariat’s North Block today.

With a focus on fiscal consolidation and economic growth, Budget 2025 is expected to offer a comprehensive roadmap for India’s economic future.