Understanding the 2025 Budget: What It Really Delivers

The Indian government’s budget, which outlines the financial plans for the year, has seen a continued focus on fiscal consolidation rather than increased public spending. This year’s budget size is projected to reach Rs 51.62 lakh crore, a mere 7% increase from the previous year, barely enough to keep pace with inflation. The government’s emphasis remains on reducing the fiscal deficit, which is expected to be 4.5% of GDP in 2025-26.

Key Themes and Implications
This budget is shaped by neoliberal economic policies that prioritize economic growth, with the belief that growth will “trickle down” to benefit lower-income groups. However, the distribution of income remains highly unequal. The top 1% of Indians hold a disproportionate share of the country’s wealth, while the majority—comprising 93.7% of the population—struggles with low wages. This growing inequality is a critical concern.

Tax Policies and Expectations
For most of the population, especially the poor and low-income groups, expectations of significant changes in tax policies are low. The middle class desires relief on bank deposit interest taxes, which have become an essential source of income. Meanwhile, the wealthy continue to benefit from tax concessions, while corporate tax policies remain skewed in their favor. The government has forgone billions in tax revenue, which has exacerbated the wealth gap.

Employment and Farmer Concerns
While some employment growth is visible, the quality of jobs, especially in the informal sector, remains a concern. Farmers, too, continue to suffer with low incomes and limited support. The average income of a farming family is still below the poverty line, with the majority of income coming from wage labor rather than crop production. Similarly, the quality of health and education services needs urgent attention, as they remain inadequate for a large part of the population.

Conclusion
Overall, the 2025 budget, while focusing on fiscal restraint, fails to address the fundamental needs of the majority of the population, especially the poor and marginalized. The focus on maintaining a low fiscal deficit and supporting neoliberal policies means there will be minimal relief for those who need it most. Expecting drastic changes or meaningful support from this budget would be unrealistic.

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