Budget 2025: Major Shifts Expected In Fuel Prices, Healthcare, Electronics, And Income Tax Slabs

As the Union Budget 2025 is set to be unveiled on February 1, businesses across sectors are preparing for announcements that could have a significant impact on product prices and service costs. Finance Minister Nirmala Sitharaman is expected to prioritise economic growth, domestic manufacturing, and consumer relief, focusing on addressing inflation, fiscal consolidation, and job creation, according to a Business Standard report.

Arun Awasthy, President and Managing Director of Johnson Controls India, shared his thoughts with Business Standard, noting that the previous budget focused heavily on public infrastructure and sustainability. He stressed the need for continued momentum, with sectors such as railways, aviation, healthcare, hospitality, data centres, and manufacturing playing a central role in driving innovation, attracting investments, creating jobs, and transitioning India towards a greener model of development. Awasthy also highlighted the importance of promoting green building standards in both the public and private sectors to strengthen India's climate resilience.

Fuel Prices

The Indian government allocated Rs 1.19 trillion to the Ministry of Petroleum and Natural Gas in the fiscal year 2024-25 to enhance energy infrastructure. Notable allocations included funding for ONGC, IOCL, and other oil companies. However, the petroleum subsidy was reduced by 2.57 per cent, with the energy transition fund for oil marketing companies being scrapped.

Ahead of the Union Budget 2025, the Confederation of Indian Industry (CII) has called for a reduction in excise duties on fuel, hoping to stimulate consumption and reduce inflationary pressures. If the government agrees to this, consumers could see a decrease in petrol and diesel prices, which would also reduce transportation and logistics costs across industries.

Pharmaceutical Sector

The pharmaceutical sector is expected to undergo significant changes, particularly concerning the pricing of essential drugs. Biocon Ltd has urged the government to exempt life-saving drugs for cancer and rare diseases from taxes. This would make these critical treatments more accessible to patients and benefit the overall healthcare system.

The government allocated Rs 4,089.95 crore to the Department of Pharmaceuticals in 2024-25, marking a 29.4% increase from the previous year. The budget also included increased funding for the Jan Aushadhi Scheme, which aims to expand its outlets to 25,000 by 2026.

Electronics Manufacturing Sector

The electronics sector is also expected to receive substantial attention, with a proposed Rs 25,000 crore Production-Linked Incentive scheme aimed at reducing India's reliance on imported electronic components. This initiative could lead to lower prices for electronics such as smartphones and laptops in the long term.

Textiles Sector

The textile and garment industry is set to benefit from renewed financial support, tariff cuts, and incentives aimed at promoting local production. These measures could boost the competitiveness of Indian textiles globally and help reduce prices for domestic consumers.

Income Tax Slab

In a bid to provide relief to the middle class, the government is reportedly considering reducing income tax rates for individuals earning up to Rs 1.5 million annually. This move could increase disposable income, encouraging greater consumption across various sectors.

Infrastructure Development Focus

The Union Budget 2025 is expected to place significant emphasis on infrastructure, particularly railway modernisation, which could drive economic activity and influence pricing in sectors related to construction, logistics, and transport services.

A Balancing Act

As the government navigates global economic uncertainties and domestic fiscal challenges, balancing fiscal discipline with growth-oriented policies will be a key theme in the budget. While taxpayers are hoping for relief, businesses are looking for incentives to enhance competitiveness. The Union Budget 2025 will be closely watched for its implications across multiple sectors, with stakeholders anticipating measures that promote inclusivity, resilience, and sustainability in India's economic landscape.