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Union Budget 2025: People are eagerly waiting for a solution to their biggest issues such as price hike of essential commodities and reduction of taxes in the Union Budget to be tabled on February 1
Budget 2025: Union Finance Minister Nirmala Sitharaman. (File photo)
India Budget 2025 Expectations: Finance Minister Nirmala Sitharaman is preparing to present her eighth consecutive budget on Saturday (February 1). The public hopes the budget will include steps to boost slowing economic growth and ease the strain on the middle class dealing with high costs and stagnant wages while maintaining fiscal discipline.
This will bring Sitharaman closer to the record of 10 budgets presented by former Prime Minister Morarji Desai across different periods. Desai delivered six budgets as finance minister between 1959 and 1964, and four more from 1967 to 1969. Former finance ministers P Chidambaram and Pranab Mukherjee presented nine and eight budgets, respectively, under various prime ministers.
However, Sitharaman will continue to hold the record for presenting the most consecutive budgets—eight straight under Prime Minister Narendra Modi. She became India’s first full-time female finance minister in 2019 when Modi secured a decisive second term.
Here are five important concerns of the common man that require Nirmala Sitharaman’s attention.
Inflation
Households across the country have been spending more on everyday essentials, with prices for vegetables, cooking oil, and milk rising. Vegetable prices were impacted by extreme weather, while cooking oil prices surged after the government raised duties. Milk prices increased due to higher input costs. However, the recent Re 1 per litre milk price cut announced by cooperatives like Amul on January 25 will offer some relief to consumers.
Additionally, household budgets have been strained by rising prices of packaged food items like biscuits and toiletries, many of which use palm oil in production. Companies have already warned of further price hikes due to escalating costs. Lowering import duties on edible oils could help reduce the MRP of these products and ease input costs for FMCG companies.
Slow Rise in Wages
The sluggish growth in wages and salaries for workers, as well as junior- to mid-level executives, has contributed to a dip in consumption in recent months. According to Britannia’s second-quarter earnings call, wages for non-salaried workers, who make up over half the workforce in urban areas, grew by only 3.4%, compared to 6.5% for salaried workers in the past year. A report by industry body Ficci and staffing company Quess Corp found that between 2019 and 2023, wages in sectors like engineering, manufacturing, and infrastructure grew at just 0.8% annually, while wages in the FMCG industry increased by 5.4%. This occurred despite a surge in corporate profits, driven by lower taxes and robust post-Covid demand.
Economic Slowdown
The National Statistics Office has projected India’s economy to grow at 6.4% in 2024-25, marking its slowest pace since the pandemic-induced contraction. One reason for the subdued growth is the muted government spending on infrastructure projects (capital expenditure) in the first half of the fiscal year. Typically, increased government spending generates demand for materials like cement, steel, and construction machinery, boosting factory capacity utilization. When capacity reaches around 80%, companies usually expand, leading to job creation in manufacturing and construction. A strong commitment from the government to ramp up spending is crucial for spurring growth and job creation.
Slow Growth of Jobs
During the Covid pandemic, millions of people migrated back to rural areas after losing jobs in cities, leading to a rise in agricultural employment. However, this reverse migration has not been fully reversed, partly due to limited job opportunities and the higher cost of living in urban areas. Although official data shows an increase in formal sector employment, India is still struggling to create enough jobs for those entering the workforce. Besides greater government infrastructure spending, private sector investment in labor-intensive industries is essential. Additional central incentives and support for medium, micro, and small enterprises would also be beneficial.
Incidence of Taxes
The high burden of taxes continues to be a challenge for lower- and middle-income groups. While the central government has limited ability to alter indirect taxes like the Goods and Services Tax (GST), as it is determined by the GST Council, lowering import duties on essential items such as edible oil and rationalizing taxes on petroleum products could offer some relief. There has also been a long-standing demand to reduce income tax burdens for individuals in the lower- and middle-income brackets, as this would leave more disposable income. However, the NDA government has only made incremental changes so far.
