Budget 2025: Course Correction For An Economy In Transition

Introduction

The Finance Bill, 2025 (Budget) for the financial year (FY) 2025-26 was presented by the Finance Minister of India (FM) on February 1, 2025. The Budget has announced several reforms with the most significant being the overhaul of India's Income-tax law. To this end, it was announced that an Income-tax Bill would be introduced next week with the stated goal of simplification and rationalization of income tax laws. The other key aspect of the Budget, drawing from the Economic Survey,¹ has been de-regulation i.e. promotion of a free market economy.

The precursor to the Budget has been a slowing economy marked by significant slowdown in consumption and a protectionist global environment. The 2025 Economic Survey identified several challenges facing the economy and outlined the necessary areas for intervention and de-regulation. For driving economic growth, a key emphasis of this Budget has been enhancing disposable income to stimulate consumption and