As February approaches, all eyes turn to Finance Minister Nirmala Sitharaman, with expectations spanning from income tax revisions to sectoral reforms. Citizens and industries alike are hoping for measures to ease economic challenges and uplift sentiment.
The Parliament’s Budget session will take place in two parts. The first part is scheduled from 31st January to 13th February 2025, while the second part will begin on 10th March and end on 4th April 2025.
Nirmala Sitharaman’s 8th Union Budget Speech
In her 8th Budget speech, Nirmala Sitharaman is expected to announce measures like income tax breaks, GST rationalisation, and industry-specific policies to revive the economy, boost the job market, and improve consumer sentiment.
This will be her second full-fledged Budget in Modi 3.0 and her eighth overall. Sitharaman has presented six annual and two interim budgets under the NDA government’s consecutive terms.
The Budget speech is traditionally delivered in Parliament at 11 AM on 1st February, but the Finance Ministry has not officially confirmed the date.
According to official circulars, both BSE and NSE will remain open on 1st February 2025, despite it being a Saturday, to accommodate the Union Budget 2025-26. Trading will follow its usual schedule from 9:15 AM to 3:30 PM, continuing the tradition observed in previous Saturday Budgets.
Union Budget 2025 Expectations
India Plans Rs 25,000 Crore PLI Scheme for Electronics Components
India is set to launch a Rs 25,000 crore Production Linked Incentive (PLI) scheme to boost domestic production of key electronic components. The Finance Ministry has approved the proposal, and the Ministry of Electronics and Information Technology (MeitY) will seek Cabinet approval before including it in the Union Budget 2025. The scheme will focus on components like printed circuit boards (PCBs), batteries, camera modules, and display units to strengthen India’s electronics manufacturing sector.
AMFI Proposes 15-Point Tax Reform to Boost Mutual Fund Investments
The Association of Mutual Funds in India (AMFI) has proposed a 15-point tax reform plan to encourage mutual fund investments ahead of the Union Budget 2025-26. The proposal includes restoring indexation benefits for debt funds, revising capital gains tax rates, and introducing new pension-focused schemes. Other recommendations include recognising Fund of Funds as equity-oriented schemes and introducing debt-linked savings plans to incentivise investments in high-rated bonds.
Government Reshuffles Finance Ministry Ahead of Union Budget 2025-26
To strengthen its leadership team for the Union Budget 2025-26, the government has reshuffled portfolios within the Ministry of Finance. Tuhin Kanta Pandey has been appointed Secretary of the Department of Revenue while continuing his role as Finance Secretary. Arunish Chawla will head the Department of Investment and Public Asset Management (DIPAM) and oversee the Department of Public Enterprises (DPE) and the Ministry of Culture.
Evolution of Income Tax in India Under FM Nirmala Sitharaman
Over the past 4 years, Finance Minister Nirmala Sitharaman has introduced reforms to simplify India’s income tax system. The new tax regime provided relief by offering tax exemptions to salaried individuals earning up to Rs 7.75 lakh. Sitharaman also strengthened the National Pension System (NPS), allowing private-sector employees to claim up to 14% of their basic salary deductions, promoting long-term savings. The Tax Collection at Source (TCS) mechanism was modernised to simplify the tax process for employees.
RBI Reshuffles Deputy Governors’ Portfolios
The Reserve Bank of India (RBI) has reshuffled portfolios among its deputy governors following the retirement of Dr Michael Debabrata Patra. M Rajeshwar Rao, the new senior-most deputy governor, has taken charge of the Monetary Policy Department. The reshuffle affects 33 departments, now distributed among three deputy governors—Rao, T Rabi Sankar, and Swaminathan Janakiraman. Rabi Sankar will oversee 13 departments, including Currency Management and Financial Markets Regulation, while Janakiraman will handle nine departments, including Supervision and the Deposit Insurance and Credit Guarantee Corporation.
NAREDCO Suggests Increase in Housing Loan Interest Deduction
Ahead of the Union Budget 2025, the National Real Estate Development Council (NAREDCO) has proposed increasing the housing loan interest deduction limit from Rs 2 lakh to Rs 5 lakh to promote affordable housing. NAREDCO also urges the government to grant infrastructure status to the housing sector, which would attract more funds and foster growth in affordable housing, urban development, and road infrastructure.
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