Union budget : Petrol and Diesel Prices, Tax Reforms, and Key Announcements Expected in the 2025 Budget

The Union Budget 2025, set to be presented on February 1, will mark the eighth consecutive budget from Finance Minister Nirmala Sitharaman. The government is expected to introduce several significant reforms, focusing on economic relief, public welfare, and sectoral growth. Analysts suggest that at least six major announcements could shape the fiscal year ahead. These anticipated measures are based on a combination of public needs, BJP’s manifesto promises, and reports from the government and media.

Union budget : Petrol and Diesel Prices: Potential Relief on the Horizon

• Petrol and diesel prices may see a reduction if excise duties are cut. Currently, an excise duty of ₹19.90 per litre is levied on petrol and ₹15.80 per litre on diesel.

• The import duty on consumer electronics parts could be lowered from 20%, potentially making items like mobile phones cheaper.
• Conversely, the import duty on gold and silver may be increased from 6%, possibly leading to higher prices for these precious metals.

Union budget : Reasons Behind the Expected Changes

• The Confederation of Indian Industry (CII) has recommended an excise duty reduction on petrol and diesel.
• Lowering the import duty on electronic components will help boost domestic manufacturing, aligning with the government’s “Make in India” initiative.
• The government’s move to increase the import duty on gold follows a surge in gold imports, which could help address the widening trade deficit.

Union budget : Income Tax: Up to ₹10 Lakh Income Could Be Tax-Free

• The government is likely to make income up to ₹10 lakh tax-free under the new tax regime.
• A new tax bracket of 25% may be introduced for incomes between ₹15 lakh and ₹20 lakh. Currently, the highest tax rate of 30% applies to income above ₹15 lakh.
• Additionally, the basic exemption limit may be raised from ₹3 lakh to ₹5 lakh under the new regime.

Union budget : Reason for the Tax Reforms

• Analysts believe the government is keen to encourage the adoption of the new tax regime, which is simpler and requires fewer documentation requirements compared to the old tax system.

Union budget : Social Welfare: Major Increases in Support Schemes

• The PM Kisan Samman Nidhi, which currently provides ₹6,000 annually to over 9.4 crore farmers, may be doubled to ₹12,000.
• The scope of Ayushman Bharat Yojana could be expanded to include more citizens, while Atal Pension Yojana (APY) may see a significant increase in the maximum monthly pension, from ₹5,000 to ₹10,000.

Union budget : Reasons for the Proposed Enhancements

• A Standing Committee of Parliament has recommended increasing the PM Kisan Samman Nidhi to ₹12,000.
• The government aims to extend better healthcare access through Ayushman Bharat and strengthen the APY to boost financial security for the elderly.

Union budget : . Employment Generation: Internship Opportunities and Support for Startups

• A comprehensive ‘Integrated National Employment Policy’ may be unveiled, which will consolidate employment schemes across ministries.
• A graduate internship program for rural youth to work in government offices may be introduced, while an International Mobility Authority could assist those seeking jobs abroad.
• Support for startups focused on skill development and job creation could be bolstered.

Reasons for Employment-Focused Reforms

• The CII has pushed for an integrated employment policy to address youth unemployment.
• With India’s median age of 29, there is an urgent need to generate job opportunities for the country’s young population.

Health Sector: Increased Budget and Infrastructure Boost

• The health sector budget may increase by approximately 10%, building on last year’s allocation of ₹90,958 crore.
• Import duties on medical equipment, including MRI machines, could be reduced, making healthcare more affordable.
• The government is also set to announce a roadmap for adding 75,000 new medical seats over the next five years to address the shortage of healthcare professionals.

Reasons for the Health Sector Reforms

• Increased funding is essential to enhance health infrastructure and reduce treatment costs, which will be aided by the reduction in custom duties on medical equipment.
• Prime Minister Modi’s vision of transforming India into a global education hub includes increasing access to medical education within the country.

Union budget : Affordable Housing: Increased Limits for Tax Benefits

• The affordable housing price cap may rise, with limits for metro cities increasing from ₹45 lakh to ₹70 lakh, and for other cities, from ₹45 lakh to ₹50 lakh. Buyers within these price ranges will benefit from government schemes.
• The tax exemption for home loan interest could be increased from ₹2 lakh to ₹5 lakh.

Reasons for the Housing Reforms

• India faces a shortage of 1.01 crore affordable homes, which is projected to grow to 3.12 crore by 2030.
• The real estate sector has called for increased tax exemptions to support homebuyers.

These measures reflect the government’s push to stimulate economic growth, enhance public welfare, and address pressing challenges in sectors like employment, health, and housing. As the budget date approaches, these announcements could provide key insights into the government’s vision for India’s economic future.