Key Highlights:
- Middle-Class Tax Relief: Potential increase in standard deduction to ₹1 lakh and new 25% tax slab for income above ₹15 lakh.
- Real Estate Reforms: Industry status demand, affordable housing redefinition (₹65 lakh cap for metros), and green housing incentives.
- Healthcare Priorities: Tax cuts on cancer therapies, robotics, and focus on non-communicable diseases (NCDs).
- Startup Support: Simplifying compliance, expanding capital access, and R&D incentives for innovation hubs.
- Insurance Sector Demands: GST cuts on health premiums and a dedicated health regulator to tackle medical inflation.
New Delhi: As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025-26 on February 1, expectations are soaring across India’s economic spectrum. With subdued consumption and shrinking private capex, the budget is poised to address sectoral pain points while maintaining fiscal discipline. From income tax relief for the middle class to reforms in healthcare and real estate, here’s a deep dive into what India Inc. and households anticipate.
Middle-Class Hopes: Higher Disposable Income
The middle class is eyeing significant tax reforms to boost spending power:
- Standard Deduction Hike: Likely raised from ₹75,000 to ₹1 lakh under the new tax regime.
- Rebate Expansion: Section 87A relief may increase to ₹10 lakh for incomes up to ₹15 lakh.
- New Tax Slab: Introduction of a 25% bracket for earnings above ₹15 lakh (currently taxed at 30%).
Real Estate: Affordable Housing Push
Developers demand game-changing policies:
- Industry Status: To secure cheaper loans and GST rationalization.
- Stamp Duty Rationalization: Uniform 5% rate across states.
- Affordable Housing Redefined: Raise price caps to ₹65 lakh in metros (from ₹45 lakh) to include more buyers.
- Green Housing: Tax breaks for sustainable projects using solar/recycled materials.
Healthcare: Fighting NCDs and Cutting Costs
Stakeholders seek fiscal measures to tackle India’s silent health crisis:
- Customs Duty Cuts: From 37% to 10% on radiotherapy machines and cancer drugs.
- GST Exemptions: For preventive health check-ups and telemedicine services.
- NCD Focus: Dedicated ₹5,000 crore fund for diabetes, hypertension, and cardiac care.
Startups: Fueling Innovation and R&D
India’s startup ecosystem seeks lifelines:
- Simplified Compliance: Single-window clearance for funding and IPOs.
- Tax Holidays: Extend Section 80-IAC benefits to ESG and deep-tech startups.
- R&D Grants: 200% deductions for AI, EV, and green energy innovations.
Insurance Sector: Tackling Affordability
With health insurance penetration at just 35%, demands include:
- GST Reduction: From 18% to 5% on health premiums.
- Section 80D Hike: Raise deductions from ₹50,000 to ₹75,000.
- Health Regulator: To curb inflated hospital charges and standardize rates.
Behind the Numbers: Economic Context
- Subdued Consumption: Private final consumption grew at 4.2% in Q3 2024, lowest in 12 quarters.
- Capex Slump: Government capex fell to ₹3.2 lakh crore in FY24 (vs. ₹5.2 lakh crore in FY23).
- Corporate Earnings: Sectors like FMCG, IT, and metals report 5–8% YoY profit decline in Q3 2024.
A Budget for Inclusive Growth
As Sitharaman walks the tightrope between fiscal deficit targets (pegged at 5.3% of GDP) and populist demands, Budget 2025 is expected to prioritize long-term growth drivers like infrastructure, healthcare, and green energy while offering short-term relief to households.
Markets Watch: Nifty surges 1.2% ahead of budget; auto and realty stocks rally.
