Finance Minister Nirmala Sitharaman on Thursday engaged in discussions with stakeholders from the financial sector and capital markets as part of her seventh pre-Budget consultation meeting ahead of the Union Budget 2025-26.
The meeting was attended by senior officials, including the Finance Secretary, the DIPAM Secretary, secretaries from the Department of Economic Affairs and Department of Financial Services, and the Chief Economic Adviser to the Government of India.
Pre-Budget Consultation Series
The Ministry of Finance conducts annual consultations with experts, industry leaders, economists, and state representatives to incorporate diverse perspectives into the Budget. This year, Sitharaman has already interacted with various groups, including MSMEs, farmers’ associations, and economists.
Union Budget 2025-26 Context
The Budget, set to be presented on February 1, 2025, will be Sitharaman’s eighth and a significant milestone in the Modi administration’s third term. Stakeholders and citizens alike are keenly awaiting measures to address challenges such as:
- Weak GDP Growth:
- The Indian economy expanded by only 5.4% in the July-September quarter of FY 2024-25, significantly below the Reserve Bank of India’s (RBI) 7% forecast.
- The April-June quarter also showed subdued growth.
- The RBI recently reduced its growth forecast for FY 2024-25 from 7.2% to 6.6%.
- Consumption Slowdown:
- Sluggish consumption levels, particularly in the rural sector, pose a concern.
- However, the third quarter (October-December) witnessed recovery due to robust festival demand and a rebound in rural consumption, as per the RBI’s monthly bulletin.
- Global Economic Headwinds:
- With uncertainties in the global economy and inflationary pressures, India’s Budget is expected to focus on strengthening domestic resilience.
India’s Growth Trajectory
Despite recent challenges, India’s growth remains notable:
- GDP grew by an impressive 8.2% in FY 2023-24.
- The economy expanded by 7.2% in FY 2022-23 and 8.7% in FY 2021-22, making India the fastest-growing major economy.
Expectations for Budget 2025-26
The upcoming Budget will play a pivotal role in:
- Addressing consumption and investment gaps.
- Fostering sustainable economic recovery.
- Providing forward-looking economic guidance for the remainder of the Modi administration’s tenure.
Prime Minister Narendra Modi’s interaction with economists at NITI Aayog last week further underscores the government’s commitment to delivering a comprehensive and growth-oriented Budget.
All eyes will be on Sitharaman’s proposals as she aims to balance fiscal prudence with measures to stimulate economic momentum.