Budget 2025 Expectations: Global financial services company Nomura said that the central government may change the income tax slab to encourage consumer spending in the upcoming general budget for 2025-26.
Budget 2025 Expectations: Global financial services company Nomura said that the central government may make changes in the income tax slab to encourage consumer spending in the upcoming 2025-26 general budget. Along with this, Nomura also estimated that the government will focus on both fiscal consolidation and measures to support growth in the budget.
GDP is estimated to be 4.8 percent
The financial services firm expects India to exceed its fiscal deficit target for FY25 and the deficit is estimated at 4.8 percent of gross domestic product (GDP), slightly lower than the earlier forecast of 4.9 percent.
This change has happened due to the reduction in capital expenditure (capex) spending. For the financial year 2026, Nomura estimates that capital expenditure will remain at 4.4 percent of GDP, which is in line with India’s medium-term goals.
Demand to increase the limit of FDI in the insurance sector
Nomura also expects public capital expenditure to grow by 12.5 per cent year-on-year in FY26. Nomura expects an increase in import duty on gold, expansion in foreign direct investment (FDI) limits in the insurance sector and steps to boost capital inflows to support the rupee.
In addition, the financial firm said India’s gross market borrowing will increase marginally in FY26 to Rs 14.4 lakh crore from Rs 14 lakh crore in the current financial year. At the same time, net market borrowing will fall to Rs 11.03 lakh crore, which is Rs 60,000 crore less than FY25.
Additionally, Nomura believes that the government will adopt a balanced stance in the budget. This will help the Reserve Bank of India (RBI) to reduce the repo rate in the Monetary Policy Committee (MPC) meeting in February.
