The Modi government may make big announcements in the upcoming general budget to speed up the country's economy and overcome the current economic slowdown. These announcements can be made to support demand and boost growth, as the slowing economy needs help. According to the Economic Times report, these may include tax relief for the middle class, tariff measures to protect industries from adverse external environment, and initiatives to promote employment generation and private investment. The broad outline of the budget was discussed in a meeting held in the Prime Minister's Office last week and further discussions will be held for detailed information.

Budget considered to give a strong signal

According to the news, Finance Minister Nirmala Sitharaman will present the country's general budget on February 1. There is talk that the government is keen to give a strong message in the budget. The idea is growing in the government that this budget should give a strong signal. India's economic growth rate i.e. GDP is expected to reach a four-year low of 6.4% in FY 2025, which will increase the demand for measures to boost demand and investment. Relief for individuals under the new tax system, simplification of corporate tax and easy system of tax deduction at source (TDS) can also be discussed.

Efforts will be made to promote private investment

Currently, a person earning Rs 15 lakh per annum is taxed at the highest rate of 30%. A lower tax burden could help revive sluggish urban demand. Some follow-up measures based on the three employment-related incentive schemes announced in the Budget in July last year are also likely to support job creation. The Budget is expected to give more emphasis to boosting private investment. Measures to ease the foreign investment regime have also been discussed and may find a mention in the Budget.

More than Rs 31 lakh crore stuck

Tax consultancy EY India recently said that the upcoming budget is expected to focus on encouraging private capital expenditure, tax simplification and reduction in personal income tax to boost demand. More than Rs 31 lakh crore is stuck in income tax disputes by the financial year 2023-24. In view of this, there is an urgent need to settle pending cases with the Income Tax Commissioner (Appeals) and strengthen alternative dispute resolution mechanisms like advance pricing agreements and safe havens.