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A People’s Blueprint for the 2025-26 Budget!

At the threshold of the 2025 budget, the vitals of the economy are causing alarm to those who are bothered to look beyond the hyperbole and manufactured optimism. One can observe a declining credit growth (loan-to-deposit ratio is at 80%). There has been a slowing down of FDI ($3 billion in the past year). Export competitiveness has been weakening. Stock valuations seem overstretched. And, of course, the rupee is seeing newer depths. Reports seem to suggest that India’s economy is navigating a phase of subdued demand as growth in key sectors has slowed down and the dip in manufacturing is disconcerting. Numbers show that household income growth has slowed, with rural wage growth remaining stagnant and organized sector wage growth falling. Economists have pointed out repeatedly that the GDP figures anyways seem inflated as they don’t take into account the unorganised sector that has been reeling under multiple shocks over the last decade. The fact that even the organised sector is showing signs of alarm makes the situation worse. Inflation, particularly in terms of food prices, has remained sticky, at the peril of the poor who also bear the brunt of our heavy indirect taxes. Top of that, we are looking at a budget that comes in the wake of global volatility and hostile US policies under Trump both in terms of the risk of higher tariffs and visa concerns.

And yet, with the budget around the corner, the sharks are already circling around their prospects. Several leaders of India Inc have been lobbying around the government to reintroduce the scheme allowing for concessional corporate tax rates for new manufacturing. The justifications are the same: to boost growth, to attract investments and step up manufacturing. Sadly, the stated objectives were the same in 2019 when a massive tax break was offered to the corporates. But they remain far from achieved. In fact the dwindling private investment is one of the dampeners in the growth story today and it only shows that the economic headwinds don’t seem as encouraging in reality as is often projected by the government. So, it is rather amusing to ponder how the same prescriptions would yield different results. But then again, the corporates have reason to hope as this government has repeatedly displayed brazen class bias in its successive budgets.

And yet, with the budget around the corner, the sharks are already circling around their prospects. Several leaders of India Inc have been lobbying around the government to reintroduce the scheme allowing for concessional corporate tax rates for new manufacturing. The justifications are the same: to boost growth, to attract investments and step up manufacturing. Sadly, the stated objectives were the same in 2019 when a massive tax break was offered to the corporates. But they remain far from achieved. In fact the dwindling private investment is one of the dampeners in the growth story today and it only shows that the economic headwinds don’t seem as encouraging in reality as is often projected by the government. So, it is rather amusing to ponder how the same prescriptions would yield different results. But then again, the corporates have reason to hope as this government has repeatedly displayed brazen class bias in its successive budgets.

That is to say that we have been given budgets that are directed at incentivising and subsiding the rich and the corporates, while at the same time putting far greater pressure on the poor and the middle classes. The share of government revenue from income tax in fact has surpassed the same from corporate tax which shows an upside down approach towards the budget. The same class bias is evident in the government’s reluctance in providing the budgetary support that is actually needed to bolster a rights based framework that can sustain a truly welfare state and one that can provide the resources to fulfill the state’s constitutional obligation towards its people.

Onwards to the budget, in a video series curated by Centre for Financial Accountability in collaboration with The Wire, prominent rights activists, economists, experts and social practitioners have put forth their insights on what the budget should ideally look like in today’s context. Based on observations, critical inputs and demands put forth in this series titled “The Budget India Needs: What is at stake”, we present here the highlights of what is needed if we were to design a people’s budget. We cover concerns around a very broad spectrum ranging across agriculture, health, education, pension, NREGA, food security, MSMEs, banking, urban development and climate emergency. We also share concerns around what a budget catering to the needs of the dalits and adivasis and oppressed genders ought to look like.

Read and Download the Report here: The Budget India Needs: A People’s Blueprint for the 2025-26 Budget!