Union Budget 2025: Blockbuster Vision or Box Office Gamble?

Some economic commentators have likened this year's Union Budget to a Bollywood-style blockbuster movie. While that might be an overdramatisation of what in reality is a prosaic financial statement, the similarities are undeniable. Nirmala Sitharaman 2025 is grand in vision and heroic in ambition, aiming to establish an economic order built on trust—where, ultimately, the good prevails.

The FM has placed two big bets on the table, both pivoting on trust.

First, she believes that putting more money in the pockets of the middle class would fire-up consumption, driving economic growth and, indirectly, boosting incomes and tax revenues, despite her generous write-offs. In her reckoning, as the economy accelerates, many who have moved out of the tax net would return as their incomes surpass the ₹12 lakh per year threshold, boosting revenues. Parallelly, she is betting that the incomes of taxpayers above this level would grow rapidly, in step with the economy, resulting in significantly higher tax collections, despite the lower rates.  

Second, she is betting on intrinsic taxpayer honesty: with significantly lower tax rates, people will be more inclined to pay rather than evade taxes. If this gamble pays off, it could not only boost revenues but also reduce the government's spending on tax compliance enforcement. In the long run, it might even achieve the seemingly impossible—cordial relations between the taxman and the common citizen.

If the plan unfolds as scripted, it could indeed be the stuff of blockbuster films. One can only hope there are no hidden Mogambos lurking in the background.

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