On Saturday, February 1, Union Finance Minister Nirmala Sitharaman is set to present the highly anticipated Union Budget 2025-26 in the Lok Sabha. As always, entrepreneurs, businesses, and the general public have high hopes for what this budget will bring. In particular, the Madhya Pradesh government is eagerly awaiting more devolution, which refers to the share of taxes provided by the central government to the states. With the state’s population increasing, Madhya Pradesh hopes for greater financial support to boost its development work.
Madhya Pradesh’s Expectations from the Budget
The Madhya Pradesh government has been vocal in its demand for increased financial assistance from the Union government. Before the Union Budget’s presentation, the state government requested a liability of Rs 17,000 crore from the Centre. The Union government’s interim budget in July last year indicated that Madhya Pradesh would receive Rs 97,000 crore in 2024-25, but so far, only Rs 80,000 crore has been released. The state now seeks the release of the pending Rs 17,000 crore, emphasizing the need for timely financial support to meet its developmental goals.
Focus on MSMEs and Economic Growth
As the Union Budget 2025 looms large, stakeholders in Madhya Pradesh are calling for policies that encourage economic growth and infrastructure development. Avinash Mishra, National President of the Quality Circle Forum of India, emphasized that the budget should focus on driving economic growth while also fostering job creation. One key sector that needs attention is the Micro, Small, and Medium Enterprises (MSMEs) sector. Increased credit availability for MSMEs could provide a significant boost to local businesses and support economic diversification.
A recurring issue raised by local businesses is the disparity in fuel tax rates across states. The Gwalior District Petroleum Dealers Association Secretary pointed out that the absence of a “One Nation, One Tax” system has led to significant losses for dealers in Madhya Pradesh. This issue has also contributed to higher fuel prices, creating a strain on both businesses and consumers. Many are hopeful that the budget will address this issue and consider reducing tax rates to bring uniformity across the country.
Simplifying the Tax System
Another common concern is the complexity of the tax system, especially for small businesses and individuals. Sandeep Mittal, a bullion trader, highlighted the need for the government to focus on increasing GDP and making the tax system simpler and more accessible. With rising living costs, the middle class, particularly those earning Rs 20,000 per month, often faces a disproportionate tax burden. The budget must address this challenge by introducing tax reforms that ease the financial load on the common man.
Deepak Aggarwal, Honorary Secretary of the MP Chamber of Commerce and Industry, urged the government to avoid populist measures in the Union Budget 2025. Instead, he emphasized that the budget should cater to the needs of the common man while ensuring that funds are allocated effectively to areas that generate revenue, such as businesses and industries. Aggarwal further suggested that smaller towns and cities like Gwalior should not be neglected and that provisions should be made for their development too.
GST on Educational Materials
Jayesh Srivastava, the coordinator of Gurukul Dream Foundation, expressed concern over the Goods and Services Tax (GST) being imposed on educational materials, which are now taxed at 18%. The increasing cost of education is a growing issue, with even primary education becoming more expensive for students. Srivastava urged the government to address this issue in the upcoming budget by removing GST on educational materials and allocating funds for the promotion of higher education.
Dr. Anju Srivastava, Assistant Professor at JC Mill Girls College, pointed out that skill development has become a key focus in the new education policy. However, the execution of these programs needs attention. According to Srivastava, skill development initiatives should be more than just projects—they should be a focal point of the education system to improve the GDP and prepare the youth for future challenges. She encouraged the government to prioritize skill development in the budget, which could further stimulate economic growth and help create a more skilled workforce.
Budget 2025’s Potential Impact
As Madhya Pradesh and other states prepare for the presentation of Union Budget 2025, the stakes are high. The state government hopes for an increase in devolution to support its expanding population and development needs. Additionally, local businesses and citizens are looking for tax reforms, a simplified tax system, and specific measures to enhance economic growth and job creation. The Union Budget 2025 will play a crucial role in addressing these concerns and shaping the economic landscape for the state in the years to come.
With the country’s eyes on Nirmala Sitharaman as she prepares to present the budget, stakeholders from Madhya Pradesh and across India eagerly await a budget that fosters growth, equity, and development for all.
