Budget 2025 Updates: What Becomes More Affordable and What Becomes More Expensive for Indian Households
Budget 2025: Emphasizing growth and the middle class, with expected price changes in electronics, EVs, and luxury goods. The budget also tackles inflation and promotes domestic manufacturing, featuring key announcements.
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26, highlighting key priorities aimed at boosting economic growth, ensuring inclusive development, supporting industries, and improving household sentiment. The budget also focused on enhancing the spending power of India's expanding middle class. "The Union Budget 2025-26 is designed to: a. Accelerate growth, b. Secure inclusive development, c. Energize society and industry, d. Uplift household sentiment, and e. Enhance the spending power of India's rising middle class," said Sitharaman while outlining her budget focus.
Economic Backdrop and Growth Projections:
he Budget comes against the backdrop of a projected GDP growth rate of 6.4 percent for the current financial year, marking a four-year low and aligning closely with India’s decadal average.
The Economic Survey 2024-25, presented by the finance minister in both Houses, estimates India's GDP growth to range between 6.3-6.8 percent in FY26. This growth rate, however, falls short of the levels required for India to reach developed nation status, underscoring the need for deregulation and reforms in critical areas such as land and labor.
What’s Becoming More Affordable and Expensive? Key Price Changes to Watch
Items That Have Become Cheaper
Medicines: 36 life-saving drugs, including treatments for cancer and chronic diseases, are now fully exempt from Basic Customs Duty (BCD).
Electronics: The BCD on open cells and other components used in LED/LCD production has been reduced to 5%.
EV and Mobile Batteries: 35 additional goods for EV battery manufacturing and 28 more for mobile phone battery production are now exempt from customs duties.
Raw Materials & Critical Minerals: Cobalt powder, lithium-ion battery scrap, lead, zinc, and 12 other critical minerals have been exempted from BCD.
Leather Goods: Items like jackets, shoes, belts, and purses are set to become more affordable.
Marine & Shipbuilding Sector: The BCD exemption on raw materials for ship manufacturing has been extended for 10 years. Additionally, marine products like wet blue leather and frozen fish paste (Surimi) will see a reduced customs duty (from 30% to 5%).
Items That Have Become Costlier
Flat Panel Displays: The BCD has been raised from 10% to 20%, leading to higher costs for TVs and mobile phones.
Knitted Fabrics: Prices are expected to rise due to an increase in import duties.
Social Welfare Surcharge: The exemption has been removed on 82 tariff lines currently under cess, making certain imports more expensive.
FM Nirmala Sitharaman's Record-Breaking Streak
Finance Minister Nirmala Sitharaman has set a remarkable record with her continuous tenure and consistent efforts in presenting the Union Budget. She is the first woman to present the budget for the third consecutive year, breaking new ground in India's fiscal history. Under her leadership, key reforms, fiscal measures, and strategic shifts have been introduced, helping steer India through economic challenges. Her tenure is marked by an emphasis on growth, inclusivity, and long-term economic sustainability, all while making history with her unprecedented contributions.
Key Expectations and Price Changes
As the budget approaches, attention is focused on key announcements that could influence the prices of various goods and services. The middle class, in particular, is eager to see which items will become more affordable and which might see price increases. In past budgets, Finance Minister Sitharaman has reduced customs duties on items like gold, silver, and platinum. Similar measures may be introduced this time to lower the cost of consumer goods, particularly tech products and eco-friendly options such as electric vehicles and renewable energy items. These changes could make certain products more accessible and affordable.
As the Budget 2025-26 unfolds, there are several key expectations surrounding price changes and economic adjustments:
Electronics & EVs: With a focus on promoting green technologies and digital growth, prices of electronics and electric vehicles (EVs) may see both reductions and hikes depending on components, customs duties, and manufacturing incentives.
Medicines & Healthcare: With exemptions on life-saving drugs and critical materials, healthcare costs may decrease, making essential medicines more affordable.
Luxury Goods: Expect price adjustments in luxury goods and high-end products as import duties and taxes may shift to balance both domestic demand and industry growth.
Raw Materials: Prices for raw materials, such as lithium and cobalt, may fluctuate based on changes in customs duty exemptions or impositions, affecting manufacturing costs in various sectors.
Social Welfare Surcharge: The removal of certain exemptions could increase the cost of specific imports, impacting businesses reliant on international supplies.
Overall, the Budget is expected to strike a balance between making key goods more affordable while also addressing inflationary pressures and pushing for long-term economic growth.
In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced that a new Income Tax Bill will be introduced in Parliament next week. The proposed direct tax code aims to simplify tax compliance, making calculations and filing more straightforward for taxpayers. The new system is expected to remove the complexities of the current tax framework and may replace the financial year concept with a simpler structure. Additionally, Sitharaman provided significant TCS relief by raising the LRS threshold to Rs 10 lakh and removing TCS on education-related foreign remittances. The government also plans to reduce the length of the Income Tax Act by 60%, creating a more efficient and transparent tax system.
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All of the above information and references are sourced from online sources.
By HLT ..!
Great Update .