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Budget 2025: 5 reasons why this finance bill is Modi’s most pivotal yet
Budget 2025: As India prepares for Budget 2025, PM Modi's government faces unprecedented challenges, from a lack of majority to economic uncertainties. This budget could define the future as it responds to opposition attacks and a volatile global market.
Budget 2025: Union Finance Minister Nirmala Sitharaman will present the Union Budget 2025 at 11 am, today. This will be Sitharaman's eighth consecutive Budget and her second full-fledged budget of Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government formed in 2024.
1- Budget without BJP majority: Budget 2025 is Modi government second full budget without a majority post 2024 Lok Sabha elections. The Bharatiya Janata Party (BJP) was reduced to 240 seats in the 2024 general elections.
The previous budget by Nirmala Sitharaman was presented in July 2024. The government got a little over a month after the Lok Sabha election results to present the budget.
In the previous two terms, the BJP enjoyed a brute majority.
2- U-turns of Modi 3.0: On August 6, 2024, the Modi government rolled back its July budget proposal to remove indexation benefits on long-term capital gains (LTCG) tax from the sale of unlisted assets.
The Opposition reacted to the U-Turn and claimed that the government is already in a 'rollback’ mode, citing the withdrawal of the Budget announcement on indexation, among other decisions.
Indexation benefits rollback
Sitharaman had in her Budget 2024-25 announced the withdrawal of indexation benefits from real estate and LTCG tax from 20 per cent to 12.5 per cent. The proposal didn’t go down well with homebuyers as well as the real estate sector, who sought a rethink.
After the rollback, the government allowed homeowners to pay LTCG tax at a rate of 20 per cent with an indexation benefit or at a new rate of 12.5 per cent without an indexation benefit for properties acquired before July 23, 2024.
In 2016, amid protests by employees, the Modi government reversed its decision to lower the interest rate on provident fund deposits to 8.7 per cent for 2015-16 and agreed to fix it at 8.8 per cent as decided by the retirement fund body EPFO.
3- Mahakumbh Stampede Aftermath: Budget 2025 comes days after the Mahakumbh 2025 stampede that killed 30 people and injured several others on January 29.
The opposition has accused the BJP-led government of politicising the Mahakumbh congregation and promoting VIP culture at the expense of the common man.
4 - Uncertain global scenario: In 2014, expectations were low from the first term of Modi government. In 2019, the budgets came with hope. But the Budget 2025 comes against the backdrop of a volatile market, devaluation of the rupee and uncertain global scenario with Donald Trump at the helm in the United States.
Trump has already threatened to impose 100 per cent tariffs on BRICS nations, including India.
5- Opposition Attack: Amid the opposition’s attack, the Modi government needs to counter the perception of slowing economy. The opposition, led by Rahul Gandhi, is also expected to target Modi government over allegedly favouring Gautam Adani and the BJP’s disregard for BR Ambedkar.
In his address to the media before the beginning of the session on Friday, however, PM Modi took an indirect jibe at Opposition by saying that there was no foreign-backed interference in the session for the first time in ten years.
The Budget Session, which began with President Droupadi Murmu addressing both Houses of Parliament on Friday, will continue until February 13 in the first leg. The session will reconvene on March 10 and continue until April 4.
Key Takeaways
- Budget 2025 is Modi’s second full budget without a parliamentary majority.
- The government has faced backlash for its rollback of key tax proposals.
- Political tensions are high due to recent tragedies and economic uncertainties.
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First Published:1 Feb 2025, 08:59 AM IST
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