The upcoming Union Budget faces a complex economic landscape, marked by moderating growth, slowing investment, and weakening consumer demand. With corporate profitability under pressure and global uncertainties looming, the government is expected to prioritize measures to bolster consumption, create employment, and enhance workforce skills. A continued focus on fiscal consolidation is also anticipated.
Within this context, the textile industry has been identified as a key sector ripe for government support. Along with pharmaceuticals, electronics, automobiles, and footwear, textiles are recognized for their high export and employment potential. The budget is expected to outline policies designed to attract investment and cultivate a thriving ecosystem for growth within these strategically important sectors. This targeted approach aims to capitalize on India’s demographic advantage by creating jobs and equipping its young workforce with the necessary skills.
While maintaining its commitment to capital expenditure growth, the government is also likely to introduce measures to stimulate private consumption, which forms a substantial portion of India’s GDP. Strengthening consumption is seen as crucial for driving private investment. Potential strategies include marginal tax relief for the middle class and continued support for vulnerable populations.
Furthermore, the budget may address the need for a revised divestment strategy. After repeated failures to meet divestment targets, the government is under pressure to streamline the process, focusing on large-scale divestments, particularly of consistently loss-making public sector enterprises. Overcoming past obstacles, such as procedural delays and opposition from various interest groups, will be critical to unlocking the potential of divestment as a significant source of capital receipts.
