'Focus on tax and spending reforms in FY25 budget'

The full-year budget, to be presented in Parliament after the national elections, will likely focus on expenditure reforms and encourage businesses and individuals to shift to the new simplified and exemption-less tax regime, said Bibek Debroy, the chairperson of Prime Minister Narendra Modi's Economic Advisory Council (EAC-PM).

- Gireesh Chandra Prasad

In an interview, Debroy said by the time the full-year budget is presented, the terms of the Sixteenth Finance Commission to decide on the sharing of the Centre's divisible pool of taxes with states for the five years from 2026-27 will come out, indicating overall expenditure reforms needed at central and state levels. India's economy is expected to grow in the range of 6.5-7% in the medium term, Debroy said. Edited excerpts:

While government expenditure is working as a growth engine, other growth drivers like private investment, consumption and net exports have some weaknesses. In that context, what should be the broad issues that the next Union budget should address?