Budget 2025: Survey Highlights Income Tax Reforms and Growth-Driven Policies
By: Admin
Date: January 24, 2025
Categories: Tax News
Reading Time: 4 Min
Introduction to the Survey Findings
Smallcase has unveiled its Managers Budget 2025-26 Survey Report, which gathers insights from over 100 managers on its platform. The report highlights strong expectations for income tax reforms, sector-specific incentives, and policies designed to sustain economic growth while maintaining fiscal discipline.
Fiscal Discipline and Borrowing Trends
The survey reflects cautious optimism regarding fiscal discipline:
- Fiscal Deficit Expectations: 50% of managers believe the fiscal deficit will remain below 5%, signaling confidence in prudent financial management.
- Government Borrowing Forecasts: A notable 75% of respondents anticipate increased government borrowing for FY25, expecting higher expenditure to support economic growth.
Growth and Inflation: Positive Outlooks Dominate
Smallcase managers remain optimistic about India’s economic trajectory:
- GDP Growth Projections: While 56% predict GDP growth between 6-7% for FY25, 17% are even more optimistic, expecting growth to exceed 7%.
- Inflation Expectations: Most managers (52%) foresee inflation stabilizing between 4-5%, aligning with the RBI’s target range. However, a smaller group (9%) is hopeful it could fall below 4%, reflecting confidence in price stabilization.
Income Tax Reforms to Spur Consumption
The survey emphasizes the pressing need for reforms in personal income tax structures:
- Higher Exemption Limits: Managers expect higher exemption limits and rationalized tax slabs to enhance disposable incomes and stimulate consumption.
- Sector-Specific Incentives: Reforms in the capital gains tax structure and targeted tax breaks for key sectors—such as renewable energy, manufacturing, and startups—are highly anticipated.
Additionally, the government is likely to expand Production-Linked Incentive (PLI) schemes for semiconductors, electronics, and green energy. Enhanced support for research and development (R&D) could further fuel innovation.
Sectoral Priorities: Key Beneficiaries of Budget Allocations
The survey identifies several critical sectors poised to gain from the upcoming budget:
- Infrastructure, Defense, and Renewable Energy: These sectors are essential for achieving sustainability goals and ensuring geopolitical resilience.
- Health, Education, and Logistics: Investments here are critical for improving quality of life and fostering long-term development.
- Export-Oriented Industries and Electronics Manufacturing: Policies like “India+1” are expected to enhance competitiveness and drive production.
Emerging areas such as e-commerce, aerospace, and green energy are also gaining traction, driven by global trends and domestic policy shifts.
Rising Focus on ESG Investments
The report notes an increased emphasis on Environmental, Social, and Governance (ESG) investments. Managers attribute this trend to the government’s alignment with sustainability goals, particularly through renewable energy initiatives.
Government Spending Priorities
The survey suggests a potential reduction in politically motivated subsidies in favor of:
- Capital Expenditure: Increased investments in infrastructure, healthcare, and skill development.
- Growth-Oriented Policies: Focused spending to foster innovation, create jobs, and boost global competitiveness.
Conclusion: A Transformative Budget Ahead
The Smallcase Managers Budget Survey underlines the urgent need for bold income tax reforms and strategic investments to sustain India’s economic momentum. With targeted incentives, sustainability-driven initiatives, and a focus on fiscal responsibility, the upcoming Union Budget has the potential to reshape India’s economic landscape for years to come.
