Understanding India: Episode 3

Decoding the Union Budget 2025 – A Pre-Budget Analysis

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In this episode of Osborne Partners' podcast, the discussion focuses on India's economic outlook and expectations for the upcoming Union Budget. The episode delves into the reasons behind the current economic slowdown, attributing it largely to RBI's high interest rate policy aimed at controlling inflation. The conversation challenges conventional wisdom about government spending driving long-term growth, emphasising instead the crucial need for increased private investment and improved productivity.

Several structural challenges are explored, including the significant decline in domestic savings from 40% to 30% of GDP since 2007-08, insufficient foreign direct investment, weak contract enforcement, and inadequate skill development. The discussion on budget expectations highlights the importance of investment-oriented tax cuts, reduced government expenditure, and implementation of crucial reforms in labour laws and the power sector.

The episode also examines the growing issue of competitive populism and its impact on public finances, along with the increasing tax burden on the middle class. A key warning emerges that without significant reforms, India's growth rate might decline in the coming years, potentially jeopardizing the vision of Viksit Bharat (developed India).

The views and opinions expressed in this episode are those of the individual speakers and do not necessarily reflect the positions or opinions of Osborne Partners. Osborne Partners bares no liability or responsibility to any contents, statements, claims or representations made in this episode.
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