Budget 2025 Income Tax Slab Change: Nomura believes that the government will adopt a balanced approach in the budget, which may help the Reserve Bank of India (RBI) to reduce the repo rate in the Monetary Policy Committee (MPC) meeting in February.
Income Tax Slab Change: Global financial services company Nomura has said in its report that the central government may change the income tax slabs to boost consumer spending in the upcoming Union Budget 2025. Apart from this, the government can also focus on measures to encourage fiscal consolidation and growth in this budget.
Fiscal deficit estimated to be 4.8% of GDP
Nomura estimates that India may exceed its fiscal deficit target for the financial year 2025 (FY2025). They say that this deficit will be 4.8% of the gross domestic product (GDP), which is slightly less than the earlier estimate of 4.9%. The reason for this change is said to be a reduction in capital expenditure or capex. For FY26, Nomura estimates that capital expenditure will remain at 4.4% of GDP, which is in line with India’s medium-term targets.
Public capital expenditure may increase by 12.5% year-on-year
Further, Nomura expects that public capital expenditure may increase by 12.5% year-on-year in FY26.
The report also said that the government can take steps to increase the import duty on gold, increase the FDI limit in the insurance sector and promote capital inflows to support the rupee.
Nomura also estimated that India’s gross market borrowing will reach Rs 14.4 lakh crore in FY 2026 with a slight increase from Rs 14 lakh crore in this financial year. At the same time, net market borrowing will fall to Rs 11.03 lakh crore, which will be Rs 60,000 crore less than FY 2025.
The government will have a balanced stance in the budget
Nomura believes that the government will adopt a balanced stance in the budget, which may help the Reserve Bank of India (RBI) to reduce the repo rate in the Monetary Policy Committee (MPC) meeting in February.
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