Finance Minister Nirmala Sitharaman will announce her eighth straight Budget, with all eyes on the much-anticipated tax relief for the middle class.
Reetu | Jan 31, 2025 |
Budget 2025: Key numbers and Economic indicators to watch out for in Upcoming Budget
Finance Minister Nirmala Sitharaman will announce her eighth straight Budget, with all eyes on the much-anticipated tax relief for the middle class.
In her first Budget in 2019, Sitharaman replaced the leather briefcase, which had been used for decades to carry Budget documents, with a traditional ‘bahi-khata’ wrapped in red fabric. This year’s budget would be paperless, as it has been for the previous three years.
Here are the key figures to watch out for:
The budgeted financial deficit, or the difference between government expenditure and income, for the current financial year (April 2024 to March 2025, or FY’25), is estimated to be 4.9% of GDP. The budgetary consolidation plan calls for reducing the deficit to 4.5 percent of GDP in FY26. Markets will be closely watching the deficit figure in the FY ’26 Budget.
The government’s capital spending for this financial year is set at Rs.11.1 lakh crore. However, slower government spending in the first four months owing to Lok Sabha elections slowed the capex cycle, and the final figures for this financial year are projected to be lower than budgeted. The capex trend is likely to continue in the FY’26 budget as well.
In her 2024-25 budget speech, the finance minister declared that from 2026-27 onwards, fiscal policy would aim to sustain the financial deficit in such a way that central government debt as a percentage of GDP would fall. Markets will be keenly watching the debt consolidation roadmap from FY ’27 onwards to see when the finance minister expects general government debt-to-GDP to fall to the 60% objective. In 2024, the general government’s debt-to-GDP ratio was 85%, with 57% of that coming from the central government.
In FY25, the government’s gross borrowing budget was Rs.14.01 lakh crore. The government borrows from the market to cover its financial imbalance. The market will closely monitor the borrowing number, particularly given the reduced dividend from the RBI in FY’26 compared to Rs.2.11 lakh crore in FY’25.
The 2024-25 Budget projected gross tax income of Rs.38.40 lakh crore, representing an 11.72 percent increase over FY’24. This includes Rs.22.07 lakh crore expected from direct taxes (personal income tax, corporation tax) and Rs.16.33 lakh crore from indirect taxes (customs excise duty, GST).
GST collection in 2024-25 is expected to increase by 11% to Rs.10.62 lakh crore. GST income forecasts for FY ’26 will be closely followed, as revenue growth has slowed in the latter three months of this financial year.
Nominal GDP growth of India (real GDP plus inflation) in FY’25 is expected to be 10.5%, whereas the NSO estimates real GDP growth at 6.4%. The budget’s nominal GDP growth predictions for FY’26 will provide insight into the next financial year’s inflation trajectory.
The government expects Rs.2.33 lakh crore in dividends from the RBI and financial institutions, as well as Rs.56,260 crore from CPSEs, in the financial year 2025. These two significant non-tax revenue figures will be considered in FY’26 budget predictions.
‘Miscellaneous Capital Receipts’, which comprise earnings from disinvestment and asset monetization, were set at Rs.50,000 crore in the FY ’25 Budget. The financial year 26 budget will include a number for next year as well as a broader asset monetization agenda.
The focus would also be on spending on necessary schemes such as NREGA, as well as key sectors such as health and education.
In case of any Doubt regarding Membership you can mail us at contact@studycafe.in
Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"