Budget to Set New Reforms Blueprint

On cards: milestones for ministries, measures for states

- Gireesh Chandra Prasad

The Union Budget for 2025-26 is expected to present a blueprint of reforms planned during Narendra Modi administration's third term to boost investments and create jobs, besides outlining measures that states must take to ease the business environment.

Finance minister Nirmala Sitharaman's roadmap will cover all aspects of production and technology, building on the 'next-generation reforms' promised in the July 2024 budget, according to two people informed about the discussions, who requested anonymity. However, no changes are likely in corporate tax rates, the people said.

The blueprint will require the Centre to work alongside states, said one of the people quoted above. The government will nudge states to reform their stamp duty framework, licensing regimes for businesses and their financial management, the person said. Those lagging will be encouraged to adopt best practices from fast-developing peers.

To be sure, the central government has been using some of its fiscal support measures to states to nudge them to carry out reforms. The focus on state budgets comes after a central bank analysis in December, while highlighting improved spending quality, also flagged risks from states' farm loan waivers and free power to free transport and assistance to women.