Tax Relief, Enhanced PLI, and Infra Focus Recommended for Budget 2025-26
By: Admin | December 26, 2024
Categories: India’s Economy | News | 4 Min Read
Prime Minister Narendra Modi recently engaged with leading economists and experts to discuss recommendations for the Union Budget 2025-26. This strategic meeting aimed to sustain India’s economic growth while addressing global uncertainties.
Themed “Maintaining India’s Growth Momentum Amid Global Uncertainty,” the meeting included key policymakers such as Finance Minister Nirmala Sitharaman and NITI Aayog Vice Chairman Suman Bery.
Key Recommendations
1. Tax Relief to Revive Consumption
Economists emphasized the need for marginal tax relief to support the salaried class. By increasing disposable income, such measures can stimulate consumption and revitalize demand across sectors.
2. Enhancing Performance-Linked Incentive (PLI) Schemes
Experts recommended refining PLI schemes to make them more targeted and impactful. These enhancements could significantly boost productivity and competitiveness in key industries.
3. Prioritizing Infrastructure Development
The upcoming budget should sustain the focus on infrastructure investments and capital expenditure. These remain critical for driving economic growth and creating employment opportunities.
4. Encouraging Private and Public Investments
Given the sluggish pace of private investment, experts suggested leveraging public funds for infrastructure projects. Additionally, they advised implementing strategies to attract foreign direct investment (FDI).
Focus Areas Discussed
Employment Generation
Experts stressed the importance of addressing youth unemployment. Aligning education and vocational training with evolving market demands is key to equipping the workforce with relevant skills.
Agriculture and Rural Development
Enhancing agricultural productivity and creating sustainable rural employment emerged as priority areas. These initiatives could reduce the growing economic divide between urban and rural regions.
Export Promotion and Financial Inclusion
Promoting financial inclusion, boosting exports, and internationalizing the rupee were identified as crucial strategies for integrating India into global value chains.
Economic Context
India’s GDP growth slowed to 5.4% in Q2 FY25, marking the lowest growth in seven quarters. Challenges in manufacturing and subdued private investment have contributed to this decline.
While public capital expenditure witnessed a dip earlier this year due to the Lok Sabha elections, economists called for renewed policy measures to reinvigorate private demand and accelerate recovery.
Path Forward
This high-level consultation reflects the government’s commitment to addressing economic challenges. Insights gathered during the meeting will likely shape the Union Budget 2025-26, which Finance Minister Nirmala Sitharaman will present on February 1, 2025.
Stay tuned for updates on India’s Union Budget and its implications for economic growth.
