Nirmala Sitharaman to present her 8th consecutive Union Budget today

This is the eighth time she will be presenting the Union Budget since she was appointed as the Union Finance Minister in 2019 after Narendra Modi returned to power for the second straight term.

Apart from the regular budgets, Sitharaman also presented the interim budget last year in February.

The salaried class are expecting relief in the income tax rates or slabs this year.

She will present the budget in the Indian Parliament at 11 am.

Meanwhile, the Economic Survey, which was presented by the Finance Minister on Friday, showed that India expects the real GDP growth in FY26 to be between 6.3 and 6.8 per cent.

To realize the aspirations of Viksit Bharat by 2047, it is important that the medium-term growth outlook of India be assessed in the context of emerging global realities of Geo-Economic Fragmentation (GEF), Chinese manufacturing prowess, and global dependency on China for energy transition efforts. 

The Survey puts forth a way forward to reinvigorate the internal engines and domestic levers of growth by focusing on one central element of systemic deregulation, which will enable a paradigm of economic freedom for businesses of individuals and organizations to pursue legitimate economic activity with ease. 

The Survey stresses that the reforms and economic policy must now be on systematic deregulation under Ease of Doing Business 2.0 so that it encourages the creation of a viable Mittelstand, i.e. India’s SME sector.

The Economic Survey 2024-25 noted that agriculture growth remained steady in first half of FY25, with Q2 recording a growth rate of 3.5 per cent, marking an improvement over the previous four quarters.

Healthy Kharif production, above-normal monsoons, and an adequate reservoir level supported agricultural growth.

The total Kharif food grain production is estimated at a record 1647.05 lakh metric tonnes (LMT) in 2024-25, higher by 5.7 per cent compared to 2023-24 and 8.2 per cent higher than the average food grain production in the past five years.

The industrial sector grew by 6 per cent in first half of FY25, and is estimated to grow by 6.2 per cent in FY25. Q1 saw a strong growth of 8.3 per cent, but growth moderated in Q2 due to three key factors. First, manufacturing exports slowed significantly due to weak demand from destination countries, and aggressive trade and industrial policies in major trading nations.

 Second, the above average monsoon had mixed effects - while it replenished reservoirs and supported agriculture, it also disrupted sectors like mining, construction, and, to some extent, manufacturing.

Third, the variation in the timing of festivities between September and October in the previous and current years led to a modest growth slowdown in Q2 FY25.

The services sector continues to perform well in FY25, emphasizes the Survey. A notable growth in Q1 and Q2 resulted in 7.1 per cent growth in first half of FY25. Across sub-categories, all the sub-sectors have performed well. India’s services export growth surged to 12.8 per cent during April–November FY25, up from 5.7 per cent in FY24.

The Economic Survey states that growth process has been ably supported by stability on fronts such as inflation, fiscal health, and external sector balance. On inflation, the Survey states that retail headline inflation has softened from 5.4 per cent in FY24 to 4.9 per cent in April – December 2024. 

Food inflation, measured by the Consumer Food Price Index (CFPI), has increased from 7.5 per cent in FY24 to 8.4 per cent in FY25 (April-December), primarily driven by a few food items such as vegetables and pulses.

India’s consumer price inflation will gradually align with the target of around 4 per cent in FY26 as per RBI and IMF.