Union Budget 2025-26: Balancing Growth and Fiscal Prudence Amid Global Challenges
Union Budget 2025-26: Balancing Growth and Fiscal Prudence Amid Global Challenges
The Union Budget for the fiscal year 2025-26, set to be presented on February 1, 2025, aims to balance fiscal consolidation with growth-oriented measures. The government plans to increase capital expenditure to Rs11-11.5 lakh crore, up from Rs10 lakh crore in the previous year, to boost private investments. Despite global economic challenges, including a strong US dollar and potential tariff threats from President-elect Donald Trump, India aims to maintain a resilient growth trajectory.
Key Priorities
The budget focuses on boosting domestic consumption, fostering private investments, and continuing flagship schemes like PM-KISAN, MGNREGA, and Housing for All. The fiscal deficit is expected to reduce to 4.3-4.4% of GDP in FY26 from 4.8-4.9% in FY25, demonstrating fiscal prudence.
Expenditure and Revenue
Expenditure will focus on infrastructure, social schemes, and skilling programs. New initiatives may include a Production Linked Incentive scheme for MSMEs, increased funding for Skill India, and expanded EV charging infrastructure. Tax incentives and reduced customs duties are also on the agenda. The subsidy burden is expected to decline slightly, with significant allocations for food and fertilizer subsidies.
Borrowing and Investments
The government plans steady borrowing, with gross borrowing projected at Rs15 lakh crore and net borrowing at Rs10.8 lakh crore. Capital expenditure will drive investments in infrastructure, health, education, and space technology, aligning with the vision of "Viksit Bharat."
Doubts Revealed
Union Budget
The Union Budget is a financial plan presented by the Indian government every year. It outlines how the government will earn and spend money in the coming year.
Fiscal Prudence
Fiscal prudence means being careful and wise in managing money, especially by the government. It involves making sure that spending does not exceed income and that debts are kept under control.
Capital Expenditure
Capital expenditure refers to money spent by the government on building things like roads, schools, and hospitals. It helps in creating long-term assets that can boost the economy.
US Dollar
The US dollar is the currency used in the United States. It is important globally because many countries use it for international trade and it affects the value of other currencies, including the Indian Rupee.
Tariff Threats
Tariff threats refer to the possibility of imposing taxes on goods imported from other countries. This can make imported goods more expensive and affect trade between countries.
Donald Trump
Donald Trump is a businessman and was the President of the United States from 2017 to 2021. In this context, he is mentioned as the President-elect, meaning he is about to take office again.
Fiscal Deficit
Fiscal deficit is when the government's spending is more than its income. It means the government needs to borrow money to cover the gap.
Infrastructure
Infrastructure includes basic facilities and systems like roads, bridges, and power supply that are needed for a country to function and grow.
Social Schemes
Social schemes are programs run by the government to help people, especially the poor and needy. They can include things like free education, healthcare, and food distribution.
Skilling Programs
Skilling programs are initiatives to teach people new skills or improve existing ones. This helps them get better jobs and earn more money.
Your email address will not be published. Required fields are marked *