With India’s growth projected to hit a four-year low, Finance Minister Nirmala Sitharaman is the Union Budget presentation set for February 1. While the budget is expected to unveil measures aimed at stimulating demand, boosting consumption, fostering long-term economic stability, and advancing sustainability, by ensuring five critical economic initiatives are underscored with additional commitments to decarbonisation, we can collectively create the robust blueprint necessary for sustainable prosperity today and in the years to come.

Simply put, for India to meet the moment on climate change and meet the Viksit Bharat 2047 objective of becoming a developed nation, the acceleration of a zero emissions economy must be at the heart of every upcoming economic transformation. In other words, a developed nation is only possible by prioritizing decarbonization at scale. This five-point blueprint promises to deliver that national vision and transformative future:

Measure 1: Tax Reforms and Relief for the Middle Class

One key expectation is a significant reduction in personal income tax rates. By increasing disposable income, the government aims to lift consumption and drive economic growth. Simplifying the Goods and Services Tax (GST) framework and unifying labor compliances are also on the agenda, as these measures will reduce the administrative burden on businesses and improve efficiency.

Measure 2: Capital Expenditure, Infrastructure Development, and Sustainability

Similar to the push during last year’s budget, industry leaders are advocating for a capital spending target of Rs 11 trillion. This investment is crucial for infrastructure development, creating jobs, and stimulating economic activity. The focus will be on ensuring that borrowing remains within manageable limits while maintaining the pace of capital expenditure. But an increased emphasis on sustainable development must remain at the core of this spending. Investments in green infrastructure, renewable energy projects, and sustainable urban planning promote a successful transition to a net zero emissions economy and as such, must remain a significant budget priority.

Measure 3: Support for Small Businesses and MSMEs

The budget is expected to introduce measures to support small businesses and micro, small, and medium enterprises (MSMEs). Rationalizing GST slabs and faster refunds will enhance the ease of doing business and boost economic activity. Additionally, affordable housing initiatives and increased tax benefits under Section 80C are anticipated to provide much-needed relief to middle-class families. Encouraging MSMEs to adopt sustainable practices and green technologies during this process will prove a pivotal moment in the move toward a fully decarbonized India.

Measure 4: Healthcare and Insurance Sector Reforms

Strategic reforms in healthcare and life sciences are pivotal to shaping a resilient, inclusive system. The budget may introduce measures to streamline regulatory frameworks, accelerate research and development incentives, and facilitate the import of refurbished medical devices. Expanding import duty exemptions on life-saving drugs and reducing GST on insurance premiums are also expected to make healthcare and insurance more accessible and affordable. Incorporating sustainability practices into healthcare infrastructure, including net zero hospitals and eco-friendly medical practices, will ensure indispensable resources have the continuity and longevity needed to serve communities within and beyond crises.

Measure 5: Technology, Innovation, and Sustainability Goals

Encouraging technology adoption in various sectors is another key expectation. Promoting tools like artificial intelligence and blockchain can boost efficiency, simplify operations, and incentivize product innovation. The insurance sector, in particular, hopes for simplified procedures for Foreign Direct Investment (FDI) and tax incentives for catastrophe insurance to protect businesses and communities from natural disasters. Moreover, integrating decarbonization measures into technological advancements, including promoting clean energy, fosters an innovative, and importantly, a resilient economy. 

As India navigates global uncertainties, the upcoming budget presents an extraordinary opportunity to implement reforms that drive growth, empower citizens, and support improved living standards for all. By highlighting tax relief, infrastructure development, support for small businesses, healthcare reforms, technology adoption, and sustainability goals that thrive on decarbonisation efforts, the budget will not just keep the country nimble. It will lay a comprehensive and effective foundation for the country’s future as an enduring global economic leader.