Introduction

Finance Minister Nirmala Sitharaman recently presented her reply on the Finance Bill 2025 in the Lok Sabha, highlighting key amendments and strategies planned for the upcoming fiscal year. The bill, which was passed by the Lok Sabha on March 25, 2025, includes 35 significant amendments aimed at enhancing tax certainty and simplifying the tax system to facilitate ease of doing business in India. This article will provide an overview of the Finance Bill 2025, the amendments, and the future fiscal direction outlined by Minister Sitharaman.

Key Amendments and Provisions

The Finance Bill 2025 incorporates several crucial changes, including the abolition of a 6% digital tax on online advertisements, commonly referred to as the 'Google Tax' [2][4]. This move is expected to reduce uncertainty in international economic conditions and align with global practices. The amendments are designed to provide tax relief and promote business-friendly policies.

Key Points of the Amendments:

• Abolition of Digital Tax: Removal of 6% equalization levy on online ads to address international economic uncertainties [2].
• Increased Expenditure: Total expenditure for FY26 is set at Rs 50.65 lakh crore, marking a 7.4% increase from the previous year [4].
• Fiscal Deficit Reduction: Fiscal deficit projected at 4.4% for FY26, down from 4.8% in the current fiscal year [4].
• Capital Expenditure Boost: Allocated Rs 11.22 lakh crore for capital expenditure to support infrastructure development [4].
• Income Tax Reforms: Simplified income tax slabs; no tax for income up to Rs 12 lakhs [3].

Discussion and Debate in Lok Sabha

During the debate on the Finance Bill 2025, Minister Sitharaman emphasized the government's commitment to providing tax certainty and promoting ease of doing business. She stated that these measures are part of broader efforts to honor Indian taxpayers and facilitate the country’s progress toward becoming a developed nation by 2047 [1]. However, opposition leaders, such as Congress MP Shashi Tharoor, criticized the bill as employing "patchwork solutions" rather than addressing deeper structural economic challenges [1].

Opposition Views:

• Structural Issues: Criticism that the bill does not adequately address structural economic problems, such as manufacturing sector growth and tax system complexity [1].
• Tax Burden: Concerns about the disproportionate tax burden on individuals versus corporations and the need for fair wealth distribution [1].
• GST Complexity: Criticisms that India's GST system is overly complicated compared to international standards [1].

Future Fiscal Plans and Economic Strategy

Minister Sitharaman highlighted several future fiscal strategies, including a new Income Tax Bill that will be discussed during the Monsoon Session of Parliament. This bill is part of ongoing efforts to simplify the tax system and provide more relief to taxpayers [2][3].

Key Fiscal Strategies:

• New Income Tax Bill: To be introduced in the Monsoon Session, focusing on tax simplification and relief [2].
• GDP Growth: Estimated GDP for FY2025-26 is Rs 3,56,97,923 crore, reflecting a growth trajectory aligned with fiscal policies [4].
• Fiscal Discipline: Commitment to reducing fiscal deficit to below 4.5% in the medium term [3].

Conclusion

The Finance Bill 2025 represents a significant step in India's economic policy, aiming to create a stable tax environment and promote economic growth. While it has faced criticism from opposition parties, the bill aligns with the government’s vision for long-term economic development. As it proceeds to the Rajya Sabha for consideration, the bill's impact on India's fiscal and economic landscape will be closely monitored.