Daily Briefing: Budget 2025 brings Sitharaman face-to-face with tax reforms and global challenges

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Finance Minister Nirmala Sitharaman will be presenting her eighth consecutive Budget today, with a cut or tweak in income tax rates/slabs to ease the burden of the middle class on the cards. This is also the Narendra Modi government’s first full-year budget in the third term and is being presented against the backdrop of geopolitical uncertainties and slowing of the economic growth rate to a four-year low. Follow our Live Blog for latest updates and analysis of the Union Budget 2025.

The Economic Survey for 2024-25 was tabled by Sitharaman before the Parliament yesterday, listing out a roadmap for the country’s economy. The Survey is basically a report of the state of the Indian economy in the financial year that is coming to a close. Let’s break down what the Survey said:

1. Global Challenges: The Survey flags global economic challenges, including slower global trade and investment due to rising protectionism and China’s dominance in manufacturing.
2. Global Trade Shift: The world is moving away from the era of outsourcing manufacturing to China, which could benefit India as global supply chains reset.
3. Indian Economy: Despite global uncertainties, India’s economy remains steady, with Real GDP growth for FY25 at 6.4%, and projected to be between 6.3% and 6.8% in FY26.
4. GVA Growth: India’s Gross Value Added (GVA) growth has surpassed pre-pandemic trends and remains close to the decadal average.
5. Inflation: Headline inflation is moderating due to lower core inflation, but food inflation has increased to 8.4%, driven by supply disruptions and weather issues.

Express Opinion

Meanwhile, in today’s Opinion section, former director of the International Monetary Fund, Surjit S Bhalla, writes on why the Indian middle class needs a 1991 moment. “The time for tinkerisation of tax rates is over. A non-tinkering tax cut on February 1 will be very good (and necessary) economics. It will also be very good politics,” he writes.

Express Explained

Moving on from news of the Budget to the Delhi Assembly Elections. Delhi’s political history has seen significant changes since its first Legislative Assembly in 1952. For 37 years, from 1956 to 1993, Delhi’s Assembly was abolished, and it was governed as a Union Territory. Initially, Delhi was a Part-C state under British rule, with limited powers. In 1952, Congress won the first election, and Brahm Prakash became the first Chief Minister. However, conflicts between the CM and the Chief Commissioner led to Prakash’s resignation in 1955. The 1956 States Reorganisation Commission abolished the Assembly, making Delhi a Union Territory.

In 1991, the P V Narasimha Rao government restored some powers to Delhi, creating an Assembly with 70 seats but keeping control over land and law & order with the Centre. The rise of the Aam Aadmi Party (AAP) in 2013, led by Arvind Kejriwal, marked a new phase in Delhi’s politics. AAP’s landslide victory in 2015, winning 67 of 70 seats, and its subsequent victory in 2020 solidified its hold over Delhi’s political landscape, overshadowing both Congress and BJP.

The Big Picture

As Delhi prepares for its February 5 Assembly elections, the divide between the wealthy and working-class residents is evident at Saket’s Select CityWalk Mall. While affluent shoppers are indifferent to politics, workers express varying political opinions. Many appreciate AAP’s subsidies like free electricity and water, but remain dissatisfied with unmet promises, especially regarding safety and education while others question the effectiveness of “freebies”.

Express Review

This week, Shubhra Gupta reviews The Storyteller. “Even though the casting of the Gujju-in-real-life Paresh Rawal as the intellectual Bengali, and Adil Hussain as the sheep-counting-to-no-avail businessman, feels counter-intuitive, the actors are consummate enough to carry it off,” she writes.