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Industry players are also expecting that the first full Budget of the Modi 3.0 government will come out with more measures to accelerate the infrastructure growth needed to make India a developed nation by 2047.
Sitharaman will present the Union Budget for the next fiscal in the Lok Sabha on Saturday.
"We believe that the starting point of the Budget will be the fiscal deficit, and efforts will be made to lower the ratio by 0.5 per cent to probably close to 4.3-4.4 per cent of GDP for FY26.
"Within this framework, the budget would work to maintain, if not increase capex, in the range of Rs 11 lakh crore that will provide a fillip to investment (the revised estimate for FY25 could be lower than what was projected)," said Madan Sabnavis, Chief Economist of Bank of Baroda.
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From the perspective of banks, a more favourable tax slab for interest on bank deposits will help to provide a level playing field with equity markets and incentives for deposit holders, he added.
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Sachin Sachdeva, Vice President, Sector Head - Financial Sector Ratings, Icra opined that given the challenges around the mobilisation of deposits from the retail segment, some incentives for retail bank deposits could improve the ability of lenders to garner such deposits and support credit supply.
"This is especially important in the backdrop of the proposed changes in the liquidity coverage ratio (LCR) framework as well as moderation in the LCR of banks over past quarters. The moderation in LCR is an outcome of slower growth in retail deposits of banks," Sachdeva said.
Aadhar Housing Finance MD and CEO Rishi Anand said the upcoming Budget should focus on reviewing and modifying important regulations that take into account the current state of the housing market essential for making homeownership genuinely affordable.
"The existing Rs 2 lakh income tax deduction for housing loan interest should be increased to Rs 4 lakh. Additionally, to support first-time homeowners during the waiting period for possession, this refund should apply to residences that are still under construction for a maximum of two years," Anand added.
Easy Pay Managing Director Nilay Patel anticipates continued positive developments for the e-commerce sector, particularly in light of last year's impactful changes.
"We hope the government will further build on the reduction in the TDS rate from 1 per cent to 0.1 per cent for e-commerce operators, potentially extending additional support to enhance liquidity and simplify compliance processes," Patel said.
WTC Business and Industry Association has presented a comprehensive wishlist of reforms for the education sector to Sitharaman for consideration in the Union Budget 2025.
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WTC's key expectations for the Budget include integration of technology in education, reducing educational costs, fostering industry-academia partnerships, and tax reforms and skill development.
Golden Growth Fund (GGF) CEO Ankur Jalan, a category II AIF, opined that AIF as a tool for wealth diversification has become a preferred choice for affluent individuals, as is evident from the fact that real estate contributed the highest share of investment from AIFs at over Rs 75,400 crore in the first half of FY25 with participation from domestic and foreign investors.
"The Budget must endeavour to achieve parity in capital gains on listed and unlisted instruments to make it more attractive for both domestic and foreign investors. Also, gains from investment must be classified on similar lines across instruments so that AIFs too enjoy the benefit," he said.
Shanti Education Initiatives Managing Director Vishal Chiripal opined that for India to become a knowledge economy, emphasis on implementing and creating a mindset for research and development-related education should be a government priority.
"It is essential to have one single umbrella body for the entire education sector, which streamlines all different streams of education to have a single agenda to ease the regulation for students as well as institutions," Chiripal said.
Prashant Tripathy, managing director and chief executive officer, Axis Max Life Insurance, anticipates progressive policy measures that will strengthen India's financial ecosystem and accelerate the journey toward Viksit Bharat by 2047.
"We urge the introduction of a distinct tax deduction for life insurance, especially term insurance, under Section 80C of the Income Tax Act. Additionally, extending this benefit under the New Tax Regime would broaden financial protection and social security for a larger population segment," Tripathy said.
Parmod Sagar, chairman and managing director, RHI Magnesita India, said that with the support of various policies and budget announcements in recent years, the Indian economy's fundamentals have remained strong and resilient.
"We expect the push on the infrastructure sector and investments to continue, creating a ripple effect for the refractory industry to play a crucial role in the growth momentum," Sagar said.
Tanya Singhal, industry expert in renewable energy and founder at Mynzo Carbon & SolarArise, said there has been a consistent big push by the government to achieve the net zero target by 2070, growing 24-hour renewable energy in India and promoting climate consciousness among the masses.
Singhal suggested the allocation of Rs 500 crore for a "storage innovation fund" to support startups and research institutions developing next-generation storage technologies that will benefit the renewable and EV industries, and a tax holiday for new manufacturing units in the advanced chemistry cell (ACC) battery sector.
( Originally published on Jan 30, 2025 )
