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What products and services may see their prices change in Budget 2025?

The Finance Minister is expected to prioritise economic growth, domestic manufacturing, and offer relief to consumers in the upcoming budget to address inflation, fiscal consolidation, and job creatio

Budget 2025

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Md Zakariya Khan New Delhi

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As the Union Budget 2025 is set to be unveiled on February 1, businesses across sectors are bracing for potential announcements that could significantly impact product prices and service costs. Finance Minister Nirmala Sitharaman is expected to prioritise economic growth, domestic manufacturing, and consumer relief in a budget that addresses inflation, fiscal consolidation, and job creation.
 
Speaking to Business Standard, Arun Awasthy, president & managing director, Johnson Controls India, said the last Budget, presented just six months ago, gave significant attention to public infrastructure, while prioritising sustainability as a key focus. “This year, the momentum must continue, with sectors like railways, aviation, healthcare, hospitality, data centers and manufacturing taking center stage. These areas have immense potential to drive innovation, attract large-scale investments, create jobs, and transition India toward a greener model of development,” Awasthy said. 
 
As part of this transition, “a wider promotion and integration of green building standards in both public and private sector construction can be an incremental yet impactful step toward embedding climate resilience into India’s urban landscape,” he said. 
 

Impact on fuel prices

 
In fiscal year 2024-25, the Indian government allocated Rs 1.19 trillion to the Ministry of Petroleum and Natural Gas to enhance energy infrastructure. Key allocations include Rs30,800 crore for ONGC, Rs 27,374.04 crore for IOCL, Rs 6,880 crore for Oil India Ltd, Rs 4,886 crore for GAIL, and Rs 2,000 crore for BPCL. Notably, the strategic oil reserves received Rs 408 crore for cavern construction and Rs 628.04 crore for crude oil storage. 
 
The petroleum subsidy was reduced to Rs 11,925 crore, a 2.57 per cent decrease from the previous fiscal. However, the previously announced Rs 15,000 crore energy transition fund for oil marketing companies was scrapped as it remained unused.   ALSO READ: Budget 2025: Food, fertiliser, direct, indirect, interest subsidies decoded
 
Ahead of the Union Budget 2025, the Confederation of Indian Industry (CII) has called for a reduction in excise duty on fuel, citing the need to spur consumption and bring down inflationary pressures. If the government heeds this recommendation, consumers could see a decrease in petrol and diesel prices. Lower fuel costs would also have a cascading effect on transportation and logistics, benefiting multiple industries and reducing costs for end-users.
 

Tax breaks for pharma

 
India’s pharmaceutical sector may see significant shifts, particularly in the pricing of essential drugs. Biocon Ltd, a leading biotech company, has urged the government to exempt life-saving drugs for cancer and rare diseases from taxes. This move, if implemented, could make critical treatments more accessible to patients while boosting India’s healthcare ecosystem.
 
In the fiscal 2024-25, the Indian government allocated Rs 4,089.95 crore to the Department of Pharmaceuticals, marking a 29.4 per cent increase from the 2023-24 fiscal year. The Production Linked Incentive (PLI) schemes had received Rs 2,143 crore, a 78.6 per cent rise. 
 
The allocation for National Institutes of Pharmaceutical Education and Research (NIPERs) was reduced by 56 per cent to Rs 242 crore, while funding for the Jan Aushadhi Scheme rose by 148 per cent to Rs 285.50 crore, aiming to expand its outlets to 25,000 by 2026. 
 

Allocations for electronics

 
In the Union Budget 2024-25, the government allocated approximately Rs 15,500 crore to the electronics sector, with a focus on semiconductors and mobile manufacturing. Rs 6,903 crore is earmarked for semiconductor projects, including Rs 4,203 crore for semiconductor manufacturing and Rs 1,500 crore for chip plants. 
 
Furthermore, a proposed Rs 25,000 crore Production-Linked Incentive scheme for the electronics sector is expected to feature prominently in the budget. The scheme aims to reduce India’s reliance on imported electronic components by strengthening domestic manufacturing. If successful, this initiative could lead to lower costs for electronic goods such as smartphones, laptops, and consumer electronics in the long term.
 

Support for textiles

 
The textile and garment industry is poised for renewed focus in Budget 2025, with reports suggesting financial support, tariff cuts, and incentives to promote local production. These measures aim to enhance the competitiveness of Indian textiles in global markets while potentially lowering prices for domestic consumers. The move is also seen as a response to disruptions in the global supply chain and challenges faced by neighbouring competitors like Bangladesh.
 

Income tax adjustments

 
In a bid to provide relief to the middle class and boost disposable income, the government is reportedly considering reducing income tax rates for individuals earning up to Rs 1.5 million annually. Such a move could enhance purchasing power, driving consumption across various sectors. Taxpayers are keenly watching for revisions to tax slabs or increased deductions under Section 80C.
 

Infrastructure development

 
A shift in infrastructure priorities is anticipated, with a significant increase in allocations for railway modernisation. Sources indicate that the government will emphasise railways over road transport to drive connectivity and economic activity. This focus may influence pricing dynamics in sectors related to construction, logistics, and transport services.
 

Govt’s balancing act

 
The Union Budget 2025 comes at a critical juncture as the government navigates global economic uncertainties and domestic fiscal challenges. Balancing fiscal discipline with growth-oriented policies is expected to be a key theme. While income tax payers are expecting relief, businesses will look for incentives to enhance competitiveness.
 
Finance Minister Nirmala Sitharaman’s announcements will not only set the tone for India’s economic trajectory in the next fiscal year but also reflect the government’s commitment to addressing pressing issues such as inflation, unemployment, and industrial growth.
 
The Union Budget 2025 will be closely watched for its implications across these and other sectors, with stakeholders hoping for measures that promote inclusivity, resilience, and sustainability in India’s economic landscape.

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First Published: Jan 24 2025 | 9:01 AM IST

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