To Stimulate Consumption: Report

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for the fiscal year 2025-26 on February 1, marking her eighth consecutive budget delivery. The tradition of announcing the annual financial statement on February 1st continues, with Sitharaman having already presented six full budgets and two interim budgets. This will be the second Union Budget under the Narendra Modi 3.0 administration after the 2024 general elections. The budget presentation is expected to begin at 11 am.

The upcoming budget comes at a time when the government faces a weakening rupee, potential tariff threats from Trump, and sluggish domestic demand.

The budget announcement will take place on a Saturday, which means both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) will remain open for trading, despite their usual weekend closure. The exchanges have confirmed a live trading session for February 1 in an official circular.

This budget is expected to outline the economic course for the next three to four years and is likely to impact the Indian economy in the first half of 2025. Its significance has increased following a slowdown in India’s economic growth. The GDP growth rate dropped to 5.4% in the July-September quarter of 2024, the lowest in seven quarters, sparking calls for impactful fiscal actions.

Key expectations include taxpayers hoping for revisions to income tax slabs, particularly under the new tax regime. Businesses are anticipating incentives to encourage investment and job creation. Analysts believe the government may introduce initiatives aimed at promoting rural development, healthcare, and infrastructure while keeping fiscal discipline intact.

Interim vs Annual Budgets An annual budget outlines the government’s financial strategy for the full fiscal year, including allocations and revenue targets, and focuses on broad policy directions and sector-specific priorities. On the other hand, an interim budget is presented during election years or transitional periods. It covers essential government spending while avoiding significant announcements or policy shifts.