Finance Minister Nirmala Sitharaman will present the country’s general budget on February 1.
Modi government can make big announcements in the upcoming general budget to boost the country’s economy and remove the current economic slowdown. These announcements could be made to support demand and boost growth, as the slowing economy needs help. According to the news of Economic Times, these may include tax relief for the middle class, tariff measures to protect industries from adverse external environment, and initiatives to promote employment generation and private investment. The broad outline of the budget has been discussed in the meeting held at the Prime Minister’s Office last week and further discussions will be held for details.
Consideration of giving a strong signal to the budget
According to the news, Finance Minister Nirmala Sitharaman will present the country’s general budget on February 1. There is talk that the government is keen to send a strong message in the budget. There is a growing view in the government that this budget should send a strong signal. India’s economic growth rate or GDP is expected to reach a four-year low of 6.4% in FY 2025, which will increase the demand for measures to boost demand and investment. Under the new tax regime, relief for individuals, simplification of corporate tax and easy system of tax deduction at source (TDS) can also be discussed.
Efforts will be made to promote private investment
At present, the maximum tax applicable on a person whose annual income is Rs 15 lakh is 30%. Lower tax burden could help revive lagging urban demand. Some follow-up measures based on the three employment-related incentive schemes announced in the Budget in July last year are also likely to support employment generation. More emphasis is expected to be given to promote private investment in the budget. Measures to ease the foreign investment regime have also been discussed and may find a mention in the budget.
More than Rs 31 lakh crore stuck
Tax consultancy EY India recently said the upcoming budget is expected to focus on encouragement of private capital expenditure, tax simplification and cut in personal income tax to boost demand. More than Rs 31 lakh crore is stuck in income tax disputes till the financial year 2023-24. In view of this, there is an urgent need to clear the pending cases with the Commissioner of Income Tax (Appeals) and strengthen alternative dispute resolution mechanisms such as advance pricing agreements and safe havens.
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