- Government may introduce incentives for taxpayers to switch to the new income tax regime.
- Economic stimulus through fiscal interventions could be a focus, despite risks of deviating from fiscal deficit targets.
- Efforts to simplify GST, support MSMEs, and address regulatory burdens are key expectations.
With the Union Budget 2025 approaching, there’s growing anticipation that the government may introduce additional measures to make the new income tax regime more attractive. This follows earlier initiatives aimed at simplifying the tax structure.
At the same time, businesses and industry leaders are urging for reforms to streamline GST and reduce compliance burdens. There is a clear demand for greater ease of doing business, including simplifying laws and improving credit access for micro, small, and medium enterprises (MSMEs).
Budget 2025: Stakeholder Consultations Focus on Tax Reforms and Economic Stimulus
As Finance Minister Nirmala Sitharaman continues pre-budget consultations, there are rising expectations that the government will introduce measures to further incentivize taxpayers to adopt the new income tax regime. This move could include enhancing the attractiveness of the regime to encourage compliance and improve tax collection efficiency, as part of the broader goal to simplify the tax system.
Industry leaders and economists are also calling for fiscal interventions that will stimulate consumption and boost demand, especially in the face of current global economic uncertainties. Although these interventions might lead to slight deviations from fiscal deficit targets, there is consensus on the importance of short-term stimulus to maintain momentum in economic recovery.
Businesses are pushing for the simplification of the Goods and Services Tax (GST) system to reduce regulatory burdens. A more streamlined and business-friendly tax environment is seen as key to encouraging growth, especially for smaller businesses and startups. Additionally, stakeholders are urging the government to prioritize support for MSMEs, which have faced significant challenges in accessing credit and dealing with bureaucratic hurdles.
With the budget expected to address these crucial areas, the government is also considering the decriminalization of certain laws, which could reduce the legal burden on businesses. This focus on creating a predictable legal and regulatory environment is seen as essential to attracting more investment and fostering job creation.
The 2025 Union Budget will likely strike a delicate balance between fiscal discipline and necessary economic interventions, with a strong focus on stimulating growth, simplifying taxation, and supporting key sectors like MSMEs.
“Fiscal interventions are essential to boost demand and sustain economic momentum.”
