More Stories

Informist, Tuesday, Dec. 24, 2024 

 

NEW DELHI - Prime Minister Narendra Modi Tuesday held consultations with prominent economists and sectoral specialists to seek opinions and suggestions ahead of the Union Budget for the financial year 2025-26 (Apr-Mar). The Budget will be presented in Parliament on Feb. 1 by Finance Minister Nirmala Sitharaman.

 

Among the economists and experts who met the prime minister were Surjit Bhalla, D.K. Joshi of CRISIL, NITI Aayog Vice-Chairman Suman Bery and Chief Executive Officer B.V.R. Subrahmanyam, and the government's Chief Economic Adviser V. Anantha Nageswaran, a government source said.

 

Earlier, Sitharaman had held her own pre-Budget consultations with economists, industry experts, and trade unions. She also chaired a pre-Budget consultative meeting with officials of states and Union territories.

 

During the pre-Budget consultation with the finance minister, a common demand by economists was for a cut in personal income tax rates, though they were divided on fiscal consolidation, with some vouching for continuation of the current pace and others urging the government to slow down.

 

There has been a consistent demand from economists to rationalise personal income tax rates in the Budget for FY26 to improve domestic consumption. The suggestion comes after the country recorded a seven-quarter low GDP growth in Jul-Sept.

 

India's economic growth fell sharply to 5.4% in the September quarter owing to a slump in the growth of industrial activity, data released last week showed. During the quarter, private consumption fell to 6.0% from 7.4% in Apr-Jun, possibly due to moderation in urban demand.

 

The economy has been grappling with slowing demand since FY24. Economists had suggested even before the full Budget for FY25 in July that the government rationalise income tax rates. Following this, the government tweaked the tax slabs under the new income tax regime, and also raised the standard deduction limit to INR 75,000 from INR 50,000.

 

It is learnt that the economists urged the government to continue with its thrust on capital expenditure, but also to consider lowering the capital expenditure loans to states. The government has set a capital expenditure target of INR 11.11 trillion for FY25, which includes INR 1.5 trillion of interest-free loans to states for capital spending.

 

The issue of unemployment and food inflation also figured in the meeting with Modi Tuesday.  End

 

Reported by Shahid K. Abbas

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.