The Economic Survey will be presented first in the Lok Sabha at 12 noon, followed by the Rajya Sabha at 2 PM, in line with parliamentary procedures. This document, compiled by the Economic Division of the Department of Economic Affairs under the supervision of the Chief Economic Adviser, offers a detailed review of India’s economic performance over the previous financial year (April-March 2024-25) and provides an outlook for the next fiscal year.

The Economic Survey is crucial as it not only outlines key economic indicators and trends but also sets the stage for the Union Budget, offering valuable clues about the government’s fiscal policy, potential reforms, and the budget’s broad focus areas.

The History and Significance of the Economic Survey

The Economic Survey has been an integral part of India’s budgetary process since its inception in 1950-51. Initially included as part of the Union Budget documents, the Survey was separated from the Budget in the 1960s and presented a day before the Union Budget. Over the years, it has evolved into a comprehensive and data-driven document that provides an assessment of the country’s economic health and growth prospects.

The Survey has also had a tradition of adopting central themes that highlight critical issues affecting the economy. For instance, in 2022, the theme was ‘Agile Approach’, reflecting India’s adaptive economic strategies in response to the COVID-19 pandemic. In 2023, the theme was ‘Recovery Complete’, celebrating the broad-based recovery from the pandemic’s economic shock. Last year, the 2024 Survey focused on ‘Economic Resilience’, emphasizing India’s ability to withstand external challenges like global inflation and geopolitical tensions.

This year, attention will be focused on the central theme of the Economic Survey, which could signal the government’s strategy for addressing weaker GDP growth and consumption concerns. India’s GDP growth slowed to 5.4% in the July-September quarter of 2024-25, lower than expected, with forecasts for the full year now revised to 6.4-6.6%. The Economic Survey will provide insights into how the government plans to address these economic headwinds in the upcoming Budget.

Economic Context and the Road to Budget 2025

As the Indian economy grapples with slow growth, consumption challenges, and global uncertainties, the Budget 2025 will be scrutinized for measures to revitalize growth. India’s economy had registered impressive growth rates of 8.2% in 2023-24 and 8.7% in 2021-22, but the pace has cooled down recently. The Reserve Bank of India (RBI) has downgraded its growth forecast for 2024-25 to 6.6%, while the government’s estimate is slightly more optimistic at 6.4%.

Despite these challenges, India remains one of the fastest-growing major economies. The government’s strategies and fiscal policies for sustaining this growth will be under the spotlight in the Budget, particularly in light of weak consumption data and weaker-than-expected GDP numbers.

Key Traditions: The Halwa Ceremony and Budget Session

An important tradition preceding the Budget presentation is the ‘Halwa Ceremony’. This year, the event took place on January 24, marking the beginning of the printing process for the budget documents. The ceremony is a symbolic gesture to kick-start the preparations for the Union Budget and signifies the lockdown at the Ministry of Finance, where officials involved in budget preparation are not allowed to leave the compound until the documents are presented in Parliament.

The Budget session of Parliament is scheduled to begin on January 31 and will run until April 4, 2025, with a break from February 14 to March 10. On January 31, President Droupadi Murmu will address the joint sitting of both Houses of Parliament, outlining the government’s priorities for the upcoming year. The Union Budget will then be presented by Finance Minister Nirmala Sitharaman on February 1, with a speech detailing fiscal policies, revenue, expenditure proposals, and taxation reforms.

The Road Ahead: Scrutiny and Implementation

Once presented, the Union Budget will undergo detailed debate and discussions in Parliament, with lawmakers examining its provisions and proposing amendments. After approval by both Houses, the Budget will set in motion the implementation of the government’s fiscal roadmap for 2025-26. Key measures outlined in the Budget will be vital in shaping India’s economic trajectory, particularly in the face of global uncertainties and domestic growth concerns.

For Finance Minister Nirmala Sitharaman, this will be her seventh presentation of the Union Budget, surpassing the record set by former Prime Minister Morarji Desai, who presented five full budgets and one interim budget. The Budget 2025 will also be delivered in a paperless format, continuing the digital tradition of recent years.

As the nation looks ahead to the Union Budget, all eyes will be on the Economic Survey for clues about the government’s fiscal priorities and its vision for India’s economic future. The next few days will be crucial as the Survey and Budget presentations unfold, offering a glimpse into the economic direction for India in 2025-26.

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As the Union Budget 2025-26 approaches, the Ministry of Finance has released a comprehensive report card detailing the achievements and progress made on the budget announcements from the previous year.

In a social media post on ‘X’, the Finance Ministry stated, “let’s reflect on the significant #UnionBudget announcements and other #MajorInitiatives, and the progress made under them over time.”

Reduction in Litigation and Appeals

One of the key highlights is the introduction of the Vivad Se Vishwas Scheme, 2024, by the Central Board of Direct Taxes (CBDT), aimed at resolving pending income tax disputes. To expedite the disposal of first appeals, additional officers have been deployed. The monetary limits for filing appeals have been raised to ₹60 lakh for Tax Tribunals, ₹2 crore for High Courts, and ₹5 crore for the Supreme Court, as per CBDT’s guidelines. Furthermore, the scope of safe harbour rules has been expanded, and transfer pricing assessments are being streamlined to reduce international tax disputes.

Simplification of Capital Gains Taxation

Significant changes in capital gains taxation were implemented, including the introduction of only two holding periods: one year for listed assets and two years for unlisted and non-financial assets. Long-term gains now attract a reduced tax rate of 12.5 per cent, while short-term gains are taxed at 20 per cent. To benefit middle- and lower-income groups, the exemption limit for capital gains on certain financial assets was increased to ₹1.25 lakh per year from ₹1 lakh a year. The rationalisation of tax rates and removal of indexation have simplified computations.

Reassessment and Reopening of Cases

The provisions for reassessment have been thoroughly revised. Assessments can now only be reopened beyond three years if the escaped income exceeds ₹50 lakh, with a maximum period of five years. For search cases, the reassessment window has been reduced to six years. This move is expected to enhance tax certainty and reduce disputes.

Comprehensive Review of the Income Tax Act, 1961

The government has initiated a complete overhaul of the Income Tax Act, 1961, to make it concise and easier to understand. Over 6,500 suggestions have been received from stakeholders, and 22 specialised committees are reviewing various aspects of the Act. The goal is to complete this exercise within six months.

These reforms highlight the government’s progress on its budget promises of reducing litigation and fostering a taxpayer-friendly environment.

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The industry body has called for a more streamlined and transparent regulatory framework to support businesses, suggesting that all regulatory approvals—spanning central, state, and local levels—should be mandatorily processed through the National Single Window System (NSWS). CII believes this will significantly enhance transparency and expedite the approval process. To implement this, the first phase should include all central ministries within the next six months, followed by a phased inclusion of states. The body further suggested that a dedicated budget be allocated to incentivize states to transition fully to the platform.

The CII highlighted that as global competition intensifies and geopolitical conditions evolve rapidly, improving the domestic business environment must be prioritized. While India has made significant strides in enhancing its business climate over the past decade, the industry body emphasized the need to keep up the momentum, particularly in areas like simplifying regulatory frameworks and reducing compliance burdens.

Chandrajit Banerjee, Director General of CII, stressed that simplifying regulatory procedures and reducing compliance burdens should remain a key focus for the country in the years to come. He mentioned that sectors dealing with land, labor, dispute resolution, tax payments, and environmental compliance have substantial potential for simplification, which is essential for boosting competitiveness, fostering economic growth, and generating employment opportunities.

In addition to these suggestions, CII recommended the enactment of a law mandating public authorities to provide services within a fixed time frame and establish a mechanism for grievance redressal. The law should also include provisions for deemed approval if the prescribed timelines are exceeded.

Further, CII urged the government to expedite dispute resolution processes by enhancing court capacities and increasing reliance on Alternative Dispute Resolution (ADR) mechanisms. To tackle the issue of case backlog, the body proposed expanding the National Judicial Data Grid (NJDG) to include data from tribunals, which account for a significant portion of the country’s pending cases.

On the environmental front, CII called for a unified framework that consolidates various environmental compliance requirements into a single document. This would help streamline the process and reduce the burden on businesses. Additionally, the body suggested implementing a performance-based incentive system to recognize companies that exceed environmental standards. Such companies could be rewarded with expedited environmental and forest approvals and permits.

CII also highlighted the need for easier access to land for businesses. It recommended that states be incentivized to create an Online Integrated Land Authority that would streamline land bank management, digitize land records, and provide information on land disputes.

Other recommendations include reducing labor compliance complexities, enhancing trade facilitation, and minimizing tax-related litigation to further improve the business climate.

The 2025-26 Union Budget, scheduled for presentation on February 1, 2025, will mark Finance Minister Nirmala Sitharaman’s eighth budget. The industry and experts are keenly awaiting her announcements, which will outline the government’s economic plans for the remaining period of the Modi 3.0 administration. The upcoming budget holds particular significance against the backdrop of weaker-than-expected GDP growth and sluggish consumption in the economy.

India’s GDP grew by just 5.4 percent in the July-September quarter of 2024-25, which was notably lower than the Reserve Bank of India’s forecast of 7 percent. The previous quarter also saw slower growth than expected, raising concerns over the economic momentum.

The Finance Ministry has already begun the process of preparing the 2025-26 Budget, holding a series of pre-budget consultations with stakeholders, including industry leaders, economists, MSME representatives, and farmers’ associations. Finance Minister Sitharaman has personally conducted several rounds of discussions with various groups to gather insights for the upcoming budget.

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