This budget should focus on four major pillars: Economic Stability, Social Inclusion, Employment Generation and Investment-Based Development.
The union budget is an economic document that contains something or little for every section of society. For some, it answers tax-related issues, while for others, it addresses the requirements for medical and hospital services. For farmers, it talks about increasing their income; on the other hand, it lays down a plan to control the kitchen expenses of a homemaker. This is why the union budget became the most discussed topic in India after cricket and elections. This year, the discussions about Budget 2025 are also rampant. Reforms in the old tax system and the possibilities of heavy investment in various sectors are under discussion. But these discussions are short-lived. Today, India stands at a juncture where it is near to becoming the third-largest economy in the world. In such a situation, this budget should not only present a blueprint for one year but also an economic roadmap for the coming decade. This budget should focus on four major pillars: Economic Stability, Social Inclusion, Employment Generation and Investment-Based Development.
A balance between economic growth and inflation
The primary objective of Budget 2025 should focus on ensuring economic stability, striking a balance between economic growth and inflation and prioritising employment. According to the World Bank’s Global Economic Prospects 2025 report, India’s economy is expected to grow at a stable rate of 6.7% in the next two financial years, much higher than the global average of 2.7%. This underlines India’s economic strength and global rise. However, the slow growth rate of 5.4% in the second quarter has raised concerns. To deal with this, it is necessary to concentrate on infrastructure building by increasing capital expenditure. Also, there is a need to continue the Production-Linked Incentives (PLI) scheme to encourage private investment. Additionally, to accelerate economic growth, it is important to focus on increasing consumption levels through tax reforms. Because consumption in India accounts for approximately 60% of its GDP, making it the primary driver of the Indian economy. However, control over inflation should be a necessary element. Such measures can only ensure the benefits of economic reforms and growth for all sections of society. Inflation is a hidden tax applied to all, which can trade off all the progress. Apart from this, a clear roadmap for employment should be presented in the budget. In the last budget, the government announced internship schemes and several incentives for the manufacturing sector to create new jobs. However, there is still a lack of comprehensive and effective employment schemes. The country expects that in the upcoming budget, measures for employment generation and a vision document for this will be given priority.
Bringing the deprived sections into the mainstream
Now, the success of any budget depends on the kind of social inclusion schemes and plans the government has announced. Social schemes are the means for bringing the deprived sections into the mainstream, ensuring inclusive economic development. In the last ten years of the Modi government, efforts like Swachh Bharat Abhiyan, Jan Dhan Yojana, Ujjwala Yojana, etc., have drastically improved the standard of living of the weaker sections of society. Now, there is a need to expand these efforts and connect with other economically weak sections of society. Today, it is necessary to focus on the ‘Bottom of the Pyramid’. For this, employment and income generation will have to be given priority by going beyond basic needs (Roti, Kapda and Makan). Additionally, three steps can be taken to address rural distress by restructuring schemes like MNREGA.
- Increasing the number of working days,
- Increasing the minimum wage, and
- Adding new work areas.
This will increase liquidity in the rural economy, provide stability and increase employment opportunities. Along with this, emphasis must be laid on making women self-reliant. Beyond free facilities, such schemes must be announced to empower them economically. For instance, Women-led self-help groups can be encouraged by linking them with local manufacturing and entrepreneurship. This will not only increase women’s income, but they will also become active participants/contributors to the country’s economic progress.
A strong and well-thought-out policy for startups
Another important task in this budget should be announcing a new startup policy. This fact must be accepted that through the ‘Startup India’ initiative in 2016, India presented a new economic model, which has played an important role in economic development and employment generation in the last decade. With 118 unicorn startups as of December 2024, India ranks third after the US and China. However, given the changing economic conditions, a strong and well-thought-out policy is needed to encourage startups. Budget 2025 should take three major steps in this direction.
First, tax concessions and simplification of procedures will reduce the financial burden on startups and create a favourable environment for their development. Second, early financial support for innovation ensures easy access to credit and capital. Third, regulatory reforms make the operation of startups simple and transparent. A dedicated policy should be formulated for these reforms and announced in the upcoming budget. This policy will not only take India’s startup economy to new heights but will also contribute to economic growth and employment generation. Apart from this, it is important to pay special attention to startups that use AI, machine learning, space tech, gaming, and other advanced technologies. Budget 2025 is an opportunity to make India a global startup hub, which will establish India globally.
Focus on technological innovation and energy self-sufficiency
Finally, this budget should focus on investment-led growth. In the past years, the Modi government has made an unprecedented increase in capital expenditure, resulting in major improvements in railways and highways. Now, considering the future scenario, it is necessary to prioritise investment in other strategic sectors. For example, increasing the number of EV charging stations is important, given the growing demand for electric vehicles. A plan to set up charging stations every 5-10 kilometres should be announced in this budget. Additionally, investments in sectors such as Artificial Intelligence, Data Centers and Green Hydrogen will promote technological innovation and energy self-sufficiency. Although fiscal deficit can be a major constraint, the numbers tell that efficient financial management has controlled it. The fiscal deficit in 2021 was 9.2% of GDP, which has now come down to 4.9%. In such a situation, there is a significant scope for increasing Capex. Always remember, a budget is not just a one-day event or some announcement; it is a document that shapes the country’s fortune, and it should be inclusive, focusing on growth by adding employment.
(Disclaimer: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of organization. The content is intended for informational purposes only and is based on Author’s personal analysis and perspective.)
