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The upcoming Union Budget 2025 in India is anticipated with a mixture of hope and apprehension. While the nation had foreseen a slowdown in the current financial year, the sharp downward revision in the projected GDP growth for FY25 to 6.4% has taken many by surprise. This represents a significant drop from the 8.2% growth recorded in FY24 and marks the slowest expansion in four years. This sluggish growth has intensified concerns regarding the overall economic health of the nation and places considerable pressure on the Finance Minister, Nirmala Sitharaman, to deliver a budget that addresses these critical issues and reignites economic momentum.
Across various sectors, stakeholders are expressing their expectations and concerns ahead of the budget announcement. The real estate industry, for example, is calling for significant reforms. Amit Modi, director of County Group, highlighted the need for industry status to facilitate easier access to low-cost financing. He also stressed the importance of single-window clearance for project completion and cost efficiency. Further, the reintroduction of GST input credits for residential real estate, an increase in the home loan interest exemption to Rs 8 lakh annually, and adjustments to Section 80C to benefit first-time homebuyers are crucial demands. These measures, he argues, would significantly impact affordability and stimulate market activity.
Echoing these sentiments, Sachin Gawri, founder and CEO of RISE Infraventures, emphasized the need to address high input costs by extending input tax credits and reducing GST on materials. He proposed revising the affordable housing definition to Rs 80 lakh, reintroducing a 100% tax holiday for such projects, and creating new land banks to enhance supply. He also suggested combining home loan principal and interest deductions with a Rs 5 lakh cap, reducing the long-term capital gains holding period to two years, raising Section 54EC exemptions to Rs 1 crore, and expanding REIT benefits to attract investment. The real estate sector's success is intrinsically linked to the overall economic health and stability, making its needs a key component of a successful budget.
The startup ecosystem, a vital engine for job creation and innovation, is also looking to the budget for support. Sumit Singh, CEO and co-founder of DashLoc, highlighted the need for reducing regulatory complexities that hinder growth. He suggested establishing dedicated IT software parks to provide essential infrastructure and foster innovation. Additionally, simplifying access to loans through banks and government-backed schemes is crucial for startups to secure funding, enabling them to scale and contribute meaningfully to the economy. Addressing the challenges faced by startups is paramount to sustaining economic growth and fostering a dynamic and competitive business environment.
The healthcare sector, still grappling with the aftereffects of the COVID-19 pandemic and facing new challenges like HMPV infections, is also seeking increased investment and policy support. Dr. Pravin Gupta, principal director and chief of neurology at Fortis Hospital, highlighted the need for a clear roadmap to increase public healthcare spending, bridging the rural-urban divide and ensuring access to critical care in underserved regions. Dr. Ashish Chaudhari, managing director at Aakash Healthcare, added that reinstating the 150% deduction under Section 35AD for new healthcare projects, providing tax holidays for new projects, and offering tax relief for existing facilities are essential for making healthcare more affordable and accessible. These measures would ease the financial burden on healthcare providers and ensure that cost savings are passed on to patients.
In conclusion, the Union Budget 2025 faces immense pressure to address the concerns and expectations of various sectors within the Indian economy. The projected slowdown in GDP growth necessitates a comprehensive and strategic approach to stimulate growth, foster innovation, and improve the overall economic outlook. The budget's success will hinge on its ability to balance fiscal prudence with the necessary investments and policy reforms needed to revitalize the economy and address the pressing demands of various key sectors. The anticipation is high, and the stakes are undeniably significant.
Source: Union Budget 2025: High hopes as dark clouds loom over economy