Towards tax transparency

BUDGET 2025 PRESENTS AN OPPORTUNE MOMENT TO BUILD ON POLICY REFORMS

- Mukesh Butani Shankay Agrawal

The National Democratic Alliance government began its third term with Budget 2024, unveiling bold policy initiatives focused on job creation, sustainable growth, and technological innovation. As we approach the centennial year of independence, India faces challenges from multiple macroeconomic headwinds, given moderated growth over the past three quarters. Budget 2025 presents an opportune moment to build on policy reforms for strengthening the reform path. Fiscal deficit shall emerge as the central theme, given the 3% target. With muted domestic rural demand, private capex, and geopolitical fragmentation, achieving the fiscal target versus betting on government spending-led growth is what policy shall guide. Much as businesses will vote for betting on growth, the Budget should signal a direction.

Underscoring the commitment towards a simplified and efficient tax system, Budget 2024 introduced several reforms focusing on closing past disputes and lending certainty. Other anticipated pivotal changes are revisions in tax slabs, enabling investment in tax saving instruments, and enhanced deductions for house loan repayments to bolster disposable income and thus push consumption. The abolition of angel tax was a surprise move in 2024; however, more is required to iron out creases and propel certainty.