Steps taken in the past two years, both within and outside the Budget, on the taxation and regulatory fronts, have led to India’s premium taking a hit compared to other emerging markets, says Jimeet Modi, Founder and CEO, SAMCO Securities. 

"It has also impacted the market liquidity. For example, the regulatory action has completely destroyed the currency derivative market in India, which has dipped to Rs 5,000 crore daily turnover from the Rs 40,000 crore daily turnover earlier. In addition, a series of regulatory actions on the equity derivatives segment of the Indian capital market plus hiking the Securities Transaction Tax (STT) across the board has considerably reduced the liquidity in the market by 30-40 percent as compared to earlier period when the rates were not tinkered," says Modi. 

"In this backdrop, this time the union budget should make an attempt to restore these two things; the currency derivatives markets should be opened up as this is critical for the Indian economy to become a Developed Economy. To maintain liquidity in the capital market, the government should rationalise the STT rates on futures, options and other instruments. It may probably result in a loss of revenue for the government to some extent, but it will be more than compensated by the new inflows that will come in by way of increased liquidity and by way of increased participation," he adds. 

The financial sector—especially banks—have made a case for tax sops in the Budget 2025 for fixed deposits to support savings which have seen a reduction in the recent past.

This month, the Finance Minister chaired pre-Budget consultations with stakeholders from the financial sector and capital markets.

The meeting was also attended by the Finance Secretary and the Secretary DIPAM, besides the Secretaries of the Departments of Economic Affairs and Financial Services, and the Chief Economic Adviser.

In a bid to reduce litigation, the government may announce an Amnesty Scheme for customs to foster ease of doing business, say experts. 

The government had in the past announced amnesty schemes for excise as well as service and income taxes, but not for customs.

There are estimates that over 40,000 cases were pending in various courts and tribunals pertaining to customs duty alone.

The Union Budget is likely to lay emphasis on the country's shipping sector, sources told Zee Business.

The Budget may grant infrastructure status to the shipping sector along with announcements like cheaper loans for shipbuilding, they said. 

Indian Railways has spent 76 per cent of its budgetary outlay within the first nine months of FY25, reflecting the timely implementation of projects to expand capacity and make travel safer, according to an official statement.

According to the Budget Estimate 2024-25, the total capital expenditure for Railways stands at Rs 2,65,200 crore with gross budgetary support of Rs 2,52,200 crore.

Apparel exporters' body AEPC has urged the government to announce tax incentives, including the removal of a provision requiring payments to MSMEs within 45 days to claim deductions and customs duty exemption on garment machinery imports.

The industry body has requested an interest equalisation rate of 5 per cent. 

The upcoming Budget needs to focus on capital expenditure and infrastructure spending to boost economic growth and make it more sustainable, according to RBI Monetary Policy Committee Member Nagesh Kumar.

Sustaining infrastructure expenditure and building it further would be very helpful for creating a much more robust trajectory of economic growth for the country, according to the eminent economist. 

In the upcoming Budget, the finance ministry may announced a first-of-its-kind renewable energy park," sources told Zee Business.

The upcoming Union Budget is likely to focus on steps to promote the country's commodity exports, with a possible special financial package for this area, sources told Zee Business. 

It may contain a special Budget for commodities such as rubber, tea, coffee and cardamom, as well as the Agricultural & Processed Food Products Export Development Authority (APEDA), they said. 

With the Union Budget 2025-26 approaching, industry players are pinning hopes on significant announcements for the railway sector, particularly in freight operations and infrastructure development.

The industry also stressed the need to increase the average speed of freight trains to 50 kmph and deploy advanced 12,000 HP electric locomotives.

Industry body Nuts and Dry Fruits Council of India (NDFC) has sought the rationalisation of walnut import duty on a per-kilogram basis, a reduction in GST to 5 per cent, the introduction of a production-linked incentive (PLI) scheme for the sector.

The country's dry fruits market is projected to hit $12 billion by 2029, growing at 18 per cent CAGR, according to the industry body.

Now, let's look at where the Government of India collects all its revenue to understand several revenue-side aspects of the central government's Budget profile.

Image: July 2024 Budget documents

It's that time of the year when the country awaits what's in store for the economy and the common man in the finance minister's annual 'bahi khata' in the form of the Union Budget.

With all eyes on the Union Budget for the financial year 2025-26, here's an overview of where the Government of India earn each rupee of revenue, as per the July 2024 Budget documents. 

For instance, income tax and corporation tax form 36 per cent of every rupee of revenue that the government collects. 

These details are laid out clearly in the 'Budget at a Glance' document, part of the Budget documents tabled in Parliament.

Let's look at the where the government spends its money to understand several expenditure-side aspects of the central government's Budget profile.

Image: July 2024 Budget documents

A well-structured merchant discount rate (MDR) for UPI transactions will provide the much-needed financial incentive for banks and fintech firms—the enablers of this revolutionary platform—to invest further in innovation, infrastructure and customer-centric solutions, says Raman Khanduja, Co-Founder and CEO of Mintoak.

This move could unlock the full potential of UPI, driving inclusive growth and accelerating the journey towards a digitally empowered economy, he adds. 

, says Indifi's Alok Mittal 

Alok Mittal, Co-founder and MD of Indifi, points out that despite remarkable growth< the country's NBFC and MSME sectors face unique challenges such as liquidity constraints, operational hurdles and evolving regulatory requirements.

In order to address such challenges, harmonisation is needed in provisions related to recovery and taxation, along with diversified domestic funding sources for NBFCs, says Mittal.

"For MSMEs, improvement in credit flow through digital lending should be ensured. Empowering Account Aggregators by ensuring comprehensive GST record availability, relaxing data control obligations of REs for value-added LSPs governed under the Digital Personal Data Protection Act, and allowing NBFC-NBFC Co-lending under CLM2 are key steps that can strengthen the MSME ecosystem," he adds.