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Union Budget 2025 expectations updates: Govt should target Rs 11 trillion capital spend, says ICRA

Union Budget 2025 Latest Updates: Catch all the latest developments related to Union Budget 2025 here

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Union Budget, Budget 2024, Budget tablet, Sitharaman, Nirmala Sitharaman

Union Budget, Budget 2024, Budget tablet, Sitharaman, Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman is set to present the 2025-26 Budget on February 1. Ahead of the Budget presentation, various sectors have raised their concerns and expectations. 
ICRA has suggested that the government should set a capital spending target of Rs 11 trillion in the upcoming Budget, while offering inflation-adjusted relief on personal income tax to stimulate consumer spending.
 
Aditi Nayar, chief economist at ICRA, noted that last year's record budgeted capital expenditure of Rs 11.11 trillion is expected to fall short by around Rs 1.4 trillion. She recommended maintaining the target at the previous year's level for the next financial, with a focus on ensuring borrowing remains within manageable limits.
 
Nayar also highlighted that capital expenditure is lagging behind the required pace to meet the current financial year's target. As of November 2024, the capex spending had reached Rs 5.13 trillion, representing 46 per cent of the budgeted amount of Rs 11.11 trillion.
 
4:03 PM

Budget may include import tariff hikes to address rupee's record low drop: EY India chief

The government may consider imposing higher import tariffs in the upcoming Budget to address the recent sharp depreciation of the rupee, which has seen a significant drop in value over the last few months, according to EY India Chief Policy Advisor DK Srivastava.
 
Srivastava, a prominent economist, suggested that increased import duties could reduce the demand for dollars by importers, thus helping to stabilize the rupee, which hit an all-time low of 86.70 against the US dollar on January 13.
 
In an interview with news agency PTI, Srivastava highlighted that the rapid fall of the rupee presents a challenge for policymakers, with Budget creators focusing on fiscal concerns and the RBI addressing monetary issues. He also noted that expectations of a recovery in the US economy are contributing to a shift in global financial resources towards the US.
1:20 PM

Budget 2025-26 may alter tax policies, impacting small savings schemes

Experts suggest that the 2025-26 Union Budget may affect small savings schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY), with anticipated adjustments in tax policies and interest rate structures.
 
For small investors, the impact of the Budget on these schemes goes beyond returns. The tax advantages and government-backed security of these instruments are essential for fostering long-term wealth accumulation.
12:47 PM

Union Budget 2025: Defence spending likely to stay between 1.9-2 % of GDP

The Ministry of Defence (MoD) is unlikely to see a significant change in its allocation in the upcoming Union Budget for the financial year 2025-26 (FY26), with expectations that it will remain between 1.9 and 2 per cent of the gross domestic product (GDP). While no official statement has been made by the MoD or the government, this forecast stems from recent comments by Defence Secretary Rajesh Kumar Singh, who dismissed concerns about resource constraints.

He highlighted that even the current share of GDP allocated to defence has been challenging to fully utilise.
 
12:20 PM

US-India Tax Forum proposes simplifying TDS, customs tariff structure

Ahead of the 2025-2026 Union Budget, the US-India Tax Forum, a prominent body within the US-India Strategic Partnership Forum (USISPF), has urged for the simplification of the tax deduction at source (TDS) structure to just two or three rates. It also recommends aligning the tax rates for foreign bank branches with those of domestic banks and implementing a 10 per cent concessional tax rate on dividends for Foreign Portfolio Investors (FPIs).

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First Published: Jan 16 2025 | 12:26 PM IST

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