The year 2025 has started, and this is a big opportunity for the government to give new dimensions to the direction of the economy and stock markets. this year’s union budget 2025can be an important means not only of economic reforms but also of living up to the expectations of the public. Last time, the government had presented two budgets—one was the interim budget of February 2024 and the other was the main budget of July 23. Some big decisions were definitely taken in both these budgets, but now the 2025 budget remains the center of expectations.
GDP growth: the biggest challenge
The decline in the country’s GDP growth is the biggest concern for the government. It declined to 5.4% in the second quarter of fiscal year 2025, which is a matter of concern for the developing economy.
- Aim to become a developed nation by 2047: This goal can be realized only if the pace of the economy is accelerated.
- Prime Minister’s meeting: In the meeting held between Prime Minister Narendra Modi and economists in December 2024, the main discussion focused on accelerating growth.
There is a need to take corrective steps soon so as not only to arrest the falling GDP growth but also to take the economy to new heights.
Income tax relief: public hopes
There is a possibility of giving relief to people in income tax in Budget 2025. This can prove beneficial not only for the public but also for the economy.
- Change in tax slab: The government may reduce tax rates for taxpayers with annual income up to Rs 15-20 lakh.
- Standard Deduction: Increase in deduction will increase the spending power of people.
- Economic Impact: Tax relief will increase consumer spending, which will lead to economic growth and positive changes in the stock market.
increase in capital expenditure
The government can increase capital expenditure by up to 20%, which is extremely important for long-term growth.
- Target of last budget: Rs 11.11 lakh crore was earmarked for capital expenditure in the interim Budget 2024.
- Need for growth: The government may increase this target to 15-20% on February 1, 2025.
- long term effects: Increase in capital expenditure will pave the way for infrastructure development, employment generation and economic strengthening.
focus on fiscal deficit
Controlling fiscal deficit is also a big priority for the government.
- Figures for FY 2025: The fiscal deficit in the first 8 months has been only 50% of the target of 4.9% for the entire year.
- Target 2025: A target can be set to bring the fiscal deficit to 4.5% on February 1, 2025.
- Impact on stock market: Reduction in fiscal deficit will increase investor confidence and may lead to a boom in the market.
Measures to strengthen the economy
Many important announcements can be made by the government in Budget 2025 to boost the economy and stock market.
- Infrastructure Development: Investment in new projects can be encouraged.
- Employment Generation: There may be provisions to promote MSME sector and startups.
- foreign investment: Foreign investment can be attracted by simplifying FDI rules.
- Green Energy: The focus can be on sustainable energy projects.
