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Union Budget 2024-25 to balance investment and consumption

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With the Union Budget for FY2025 approaching, the Indian government is expected to strike a balance between supporting investment and consumption. The budget should focus on infrastructure spending, especially in road transport and railways, to sustain economic growth. While there is a need for relief in corporate income tax to stimulate private sector investment, major changes are unlikely in this area. Instead, the budget may target measures to boost demand, such as tax relief for low- and middle-income households, as well as increased expenditures on rural-focused schemes. Additionally, addressing sector-specific issues, like reducing the high GST rate on cement, could have a positive impact. The financial sector may require further support, particularly for PSU general insurance entities and the promotion of the corporate bond market. A medium-term fiscal consolidation roadmap is also expected to be outlined in the budget.