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Finance Minister Nirmala Sitharaman will present the eighth budget of her consecutive term. There are expectations that she will soon give relief to the middle-class taxpayers. Since 2019, she has changed over from the traditional red leather briefcase to the ceremonial red “bahi-khata,” and in recent years, the government has adopted a paperless budget presentation format.
Fiscal Deficit and debt roadmap
Fiscal Deficit: Projected at 4.9 per cent of GDP for FY25, and the government has set a target to bring it down to 4.5 per cent by FY26. The markets will monitor the updates on the fiscal consolidation roadmap.
Debt-to-GDP ratio: The central government debt was at 57 per cent of GDP in 2024, and the government has targeted to bring it down to 60 per cent by FY27.
Capital expenditure and borrowing
Capex: The budget for FY25 has been estimated at Rs 11.1 lakh crore. Election time may delay final spending. Expect continued capex focus in FY26.
Gross borrowing: Estimated at Rs 14.01 lakh crore for FY25. Lower RBI dividends may shape borrowing strategies in FY26.
Revenue and tax projections
Total tax revenue: Projected at Rs 38.40 lakh crore for FY25.
Direct taxes: Expected Rs 22.07 lakh crore
Indirect taxes: Estimated Rs 16.33 lakh crore.
GST collections: Projected at Rs 10.62 lakh crore for FY25, though the last few months have been slower. FY26 projections will be important.
Economic growth and inflation outlook
Nominal GDP growth: Projected at 10.5 per cent in FY25, with real GDP growth at 6.4 per cent. FY26 projections will give an idea of inflationary trends.
Dividends and disinvestment targets
Dividends: FY25 projections included:
Rs 2.33 lakh crore from RBI and financial institutions.
Rs 56,260 crore from Central Public Sector Enterprises (CPSEs).
Disinvestment and Asset Monetisation: The target for FY25 was Rs 50,000 crores. In FY26, the future plans for monetisation will be articulated.
The Union Budget 2025, therefore, will present a fiscal consolidation plan, focus on infrastructure expenditure, and create an economic growth trajectory for post-election India.
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