Expectations of income tax cut increased ( income tax) 

Delhi: Union Finance Minister Nirmala Sitharaman will present her eighth consecutive budget on Saturday, in which a cut or change in income tax   ( income tax)   rates / slabs is expected to give relief to the middle class struggling with inflation and stagnant salary increase. The Finance Minister may also take measures to support the weakening economic growth in the budget for the financial year 2025-26 while sticking to the draft of reducing the fiscal deficit.

After Prime Minister Narendra Modi invoked the Goddess of Wealth for the upliftment of the poor and the middle class, hopes of getting relief in income tax have increased. Especially the lower middle class may get some relief in the budget.

Marginal improvement in investment activity
Deloitte India economist Rumki Majumdar said the first quarter data points to a significant increase in private consumption and a marginal improvement in investment activity. She said with the completion of elections in India, it is expected that government spending will increase, which will support growth in the upcoming quarters. She said the government will continue to prioritise efforts towards skill development and job creation.

Can give priority to macro stability

Ernest & Young (EY) expects capital expenditure to increase by at least 20 per cent to boost economic activity. DK Srivastava, chief policy advisor at EY India, said the upcoming budget should balance fiscal restraint with growth measures amid the challenging economic scenario. DBS senior economist Radhika Rao said the central government can give priority to macro stability by sticking to the path of fiscal consolidation and staying away from populist measures.

Sitharaman’s record eighth budget

Finance Minister Nirmala Sitharaman on Friday finalized the first full budget of the third term of the Narendra Modi government. It is expected to strike a balance between the middle class’s aspiration for tax cuts and the needs of the economy to boost growth. Sitharaman will present a record eighth consecutive budget on February 1. The budget is expected to be fiscally prudent as well as include measures to support weakening economic growth and reduce the burden on the middle class struggling with high prices and stagnant wage growth.

Economic Review figures
The Finance Ministry said on the social media platform ‘X’, Union Finance and Corporate Affairs Minister Nirmala Sitharaman today interacted with secretaries and senior officials involved in the budget making process while finalizing the Union Budget 2025-26 in her office in North Block in New Delhi. Minister of State for Finance Pankaj Chaudhary also participated in the meeting. This budget will come at a time when the gross domestic product (GDP) growth rate is expected to fall to a four-year low of 6.4 percent in the current financial year. The Economic Survey 2024-25 presented by the Finance Minister in both the Houses has estimated that India’s GDP growth rate will be 6.3-6.8 percent in the financial year 2025-26, which is much lower than the growth rate required to become a developed nation.

The Economic Survey has pointed out the need for regulation and reforms in areas such as land and labor to promote growth. It indicated that India’s global growth is slowing down and more work is still needed to achieve the growth rate of eight percent required to achieve the goal of developed India by 2047.