RUPEE TUMBLES TO NEW LOW; INDIANS FEAR DETERIORATION OF QUALITY OF LIFE
In a sobering start to the Budget 2025-26, India's economy is projected to slow down, with the country facing increasing concerns over economic growth and inflation. Amidst this gloom, more than one-third of Indians surveyed by the C-Voter fear that their quality of life will not improve in the coming future.
As India Prepares for Budget 2025-26
Tomorrow marks a significant milestone as Union Finance Minister Nirmala Sitharaman presents Union Budget 2025-26. The budget is expected to outline new policies aimed at boosting economic growth and addressing key challenges. But, with the economy on a slower trajectory, will these measures be enough to turn things around?
Downward Trajectory
The latest advance estimates from the Ministry of Statistics reveal that India's Gross Domestic Product (GDP) growth rate is projected to be 6.4% in the financial year 2024-25, down from 8.2% recorded in 2023-24. This marks a significant decline and the lowest since the period between 2020-21 and 7% in 2022-23.
Lowest-Ever Mark for Rupee
The Indian rupee reached an all-time low of 86.41 on January 13, 2025, attributed to factors such as positive rise in dollar index and US Treasury yields that have plunged the currency into a record-low slump.
Inflation is a Growing Concern
Two-thirds of respondents to the survey, carried out by C-Voter, believe that inflation has been an issue during the Narendra Modi government. The impact of this perceived decline will be felt across India, particularly when it comes to petrol and diesel prices.
Petrol Prices at Risk as Rupee Weakens Further
As imports account for a significant 80% of India's oil intake, rising crude prices along with falling rupee will continue to push up petro prices further. Moreover, auto parts and semiconductor chips will also become expensive due to increased imports, impacting the electronics and automotive sectors.
What Does India Expect from Budget?
Another pre-budget survey conducted by Grant Thornton Bharat found that individual taxpayers are demanding relief on the personal tax front. A clear preference for lower tax rates (57%), higher exemption limits (25%), and enhanced income threshold for tax compliance (56%) are among the expectations.