Finance Minister Nirmala Sitharaman is gearing up for the upcoming Union Budget 2025-26 with a series of pre-budget consultations with various stakeholders in the financial sector and capital markets. The Ministry of Finance conducts these annual consultations with experts, industry leaders, economists, and state officials to gather insights and inputs for the budget preparation process. This year’s budget will be tabled on February 1, 2025, marking Sitharaman’s eighth budget since assuming office. The focus will be on key announcements and the government’s economic guidance for the remainder of the Modi 3.0 tenure.
The Indian economy has been facing challenges with weak GDP numbers and sluggish consumption trends. In the current financial year 2024-25, the GDP growth rate stood at 5.4 per cent in the July-September quarter, lower than the Reserve Bank of India’s forecast of 7 per cent. The central bank has revised its growth forecast for 2024-25 to 6.6 per cent, down from the earlier estimate of 7.2 per cent. The Economic Survey projected a conservative growth range of 6.5-7 per cent for the year, while acknowledging that market expectations are higher.
Despite the challenges, high-frequency indicators for the third quarter of 2024-25 suggest a recovery in the Indian economy, driven by strong festival activity and rural demand. The GDP growth rate for the previous financial year 2023-24 was an impressive 8.2 per cent, making India the fastest-growing major economy. However, the growth rates have been declining in recent years, with 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. The government will need to address these challenges in the upcoming budget to boost economic growth and consumer confidence.
The pre-budget consultations with stakeholders such as MSMEs, farmers’ associations, and economists are crucial in understanding the challenges and opportunities in various sectors of the economy. Prime Minister Narendra Modi also recently interacted with eminent economists and thought leaders to gather insights for the Union Budget 2025-26. These consultations are aimed at formulating a comprehensive budget that addresses the needs of different segments of society and boosts overall economic growth.
Key announcements in the upcoming budget are expected to focus on measures to stimulate growth, boost consumer spending, and address structural issues in the economy. As the government aims to revive economic growth and restore investor confidence, the budget is likely to include initiatives to attract investments, improve infrastructure, and create employment opportunities. The budget will also outline the government’s fiscal priorities and policy direction for achieving sustainable and inclusive growth in the post-pandemic era.
In conclusion, the pre-Budget consultations undertaken by Finance Minister Nirmala Sitharaman are crucial in shaping the Union Budget 2025-26 and addressing the economic challenges facing India. The government’s focus on stimulating growth, enhancing consumer confidence, and attracting investments will be key priorities in the upcoming budget. With the Indian economy showing signs of recovery amid global uncertainties, the budget will play a crucial role in driving sustainable and inclusive growth in the years to come.
