Budget 2025 Expectations Railways, Technology, Income Tax, Green Energy, Real Estate And EV

By Fnf Correspondent | PUBLISHED: 23, Jan 2025, 15:16 pm IST | UPDATED: 23, Jan 2025, 15:16 pm IST

New Delhi: Finance Minister Nirmala Sitharaman is set to present the Union Budget 2025 on February 1. The first part of the Parliament's Budget session will run from January 31 to February 13, while the second part is scheduled from March 10 to April 4, 2025. Traditionally, the finance minister delivers the Budget speech at 11 AM on February 1, but an official confirmation from the Finance Ministry is still awaited.

As in previous years, the Narendra Modi government faces high expectations to provide income tax relief for the salaried middle class and the common man, particularly amid rising living costs and an economic slowdown. Economists suggest that the Budget should focus on boosting consumption to stimulate the economy, as GDP growth has slowed to a multi-quarter low.

This will be Sitharaman's second full-fledged Budget in Modi 3.0, and her eighth budget presentation overall in Parliament. Furthermore, despite February 1 being a Saturday, the BSE and NSE will remain open for trading, as per official announcements, to accommodate the Union Budget 2025-26 proceedings.

With the Union Budget approaching, we urge the government to prioritize revamping India’s skilling ecosystem to meet digital age demands and empower startups and small businesses to create quality jobs. Overhauling the apprenticeship program, aligning training with employer needs at a hyperlocal level, supporting small businesses equally as startups, and leveraging AI-driven learning can bridge the skills gap and enable youth to seize entrepreneurial opportunities. Strategic skilling and entrepreneurship investments can unlock India’s demographic dividend and drive a thriving, knowledge-based economy to generate millions of jobs in the coming decades", says Dr. Ajay Kela, President & CEO, Wadhwani Foundation.

As we approach the 2025 Union Budget, the real estate sector, which contributes around 8% to India’s GDP, expects the government to bring measures to help sustain its growth trajectory. We urge the government to consider raising the tax deduction ceiling on home loan interest under Section 24(b) of the Income Tax Act from Rs 2 lakh to Rs 5 lakh, which would significantly benefit first-time homebuyers. Additionally, revising the affordable housing price cap in urban areas from Rs 45 lakh to Rs 75 lakh is critical, given the rising costs of land and construction. Granting real estate sector status would also unlock enhanced financing opportunities. We strongly believe that incorporating these policies into the budget will not only strengthen the real estate industry but also contribute significantly to the nation’s economic expansion." says, Mr. Abhishek Raj, Founder & CEO of Jenika Ventures.

As Budget 2025 approaches, the middle class and senior citizens are eagerly awaiting relief measures. For the middle class, increasing the basic exemption limit and revising tax slabs would provide financial relief. Introducing a 25% tax slab for incomes between Rs 25 lakh and Rs 30 lakh, while retaining the 30% slab for incomes above Rs 30 lakh, could reduce the steep progression in tax rates and create a fairer structure.

Increasing the home loan interest deduction from Rs 2 lakh to Rs 5 lakh would also address housing affordability challenges, especially in urban areas. For senior citizens, exempting pension income from tax or enhancing deduction limits under Sections 80C and 80D would support healthcare and retirement needs.

The 8th Pay Commission is another focus. The lowest entry-level basic pay of Rs 18,000, with DA at 53%, currently totals Rs 27,540, expected to rise to Rs 29,000 by January 2026. Based on historical trends, an average increase of 28.5% could raise it to ?37,265, with a fitment factor of 2.07x. However, aligning with the 7th Pay Commission’s fitment factor of 2.57x could increase basic pay to Rs 46,260, significantly boosting disposable incomes, driving demand, and fostering economic growth", says Sakchi Jain- CA and Financial Educator.

Railways is a crucial component to unleash the full potential of multimodal logistics in India. Today, it offers a highly cost-effective and more climate friendly medium of transportation as compared to road. It is also one of the largest employers in India, upliftment of this sector directly influences the quality and volume of jobs created in the country. Be it for passenger or cargo movement, the Indian railways is one of the most efficient and trusted modes of transportation.

The growth in Dedicated Freight Corridors (DFCs), multimodal cargo parks and similar handshake points has already started yielding better efficiencies in logistics. As more stations get developed, widening the cargo-handling footprint, it will decrease the overall logistics cost for India and is bound to increase efficiency rapidly. This will directly improve India's current 38th rank in the Logistics Performance Index curated by the World Bank.

Therefore, we are hopeful for an overall increase in the capital expenditure by 12-15% in the upcoming Union Budget for FY’26. A continued focus on infrastructure development and rail connectivity to key logistics hubs, technology transfer for advanced and modern trains, digitization, simplification of documentation and improvement of safety features will further enhance the overall efficiency of rail operations.

All of this will enable the logistics sector to harness the full potential of the Indian railways. Furthermore, a deeper integration with the manufacturing industry will bring more revenues to the railways sector, making it a key driver not just for the manufacturing sector but also for overall economic growth.", says Vineet Agarwal, Managing Director, Transport Corporation of India Ltd. (TCI).

The number of women taxpayers in India is reaching new heights. In the year 2023-24 there were over 22 million women who filed tax returns. Moreover, the budget plays a vital role in promoting economic growth and transforming the future of our nation. A budget may foster financial independence, providing several opportunities to ensure equal pay. Moreover, it would be a step towards an inclusive and sustainable economy for all. Besides, women's expectations for the upcoming budget are:

1.Greater financial inclusivity.
2.Tax relief and incentives to support working women.
3.Prioritizing gender sensitivity and taking suitable measures for it.

This budget is crucial as it presents an opportunity to empower women by creating a more equitable tax framework. Besides, it not only fosters economic independence but also removes barriers that limit women's potential. Thus, we at Gradding believe in a progressive approach that will uplift women and benefit the entire economy in the long term", said Mamta Shekhawat, Founder of Gradding.com, a study abroad platform.