Central Government's New Economic Policy: Direction of Development in 2024-2025

India's Central Government Launches New Economic Policy, Announcing Comprehensive Reform Package for FY 2024‑2025

In launching the new economic policy, the central government of India announced a comprehensive reform package for the fiscal year 2024‑2025. The plan places special emphasis on revising the tax structure, investing in infrastructure, and expanding digital services. Policymakers say these steps aim to raise the annual average GDP growth rate to 7.2 percent. At the same time, the fiscal deficit has been capped at 5.5 percent of GDP to strengthen public financial stability. This initiative reflects the central government's development‑oriented approach and reinforces national development.

Key elements of the policy include a readjustment of the income tax slab, with a 28 percent tax rate applied to income above 30 lakh rupees, while the middle class retains a 12 percent rate for income up to 10 lakh rupees. Additionally, a 5 percent extra rebate is granted on the Goods and Services Tax (GST), benefiting small businesses. In the infrastructure sector, a total budget of 3.2 trillion rupees is allocated for road, rail, and port development, which is 12 percent higher than last year's budget. To accelerate the Digital India initiative, 450 billion rupees has been invested, with special focus on rural broadband expansion.

Fiscal targets for FY 2024‑2025 have been set, with total revenue collection planned at 28.5 trillion rupees and non‑tax revenue at 4.1 trillion rupees. The government has limited public expenditure to 6.8 trillion rupees, keeping the fiscal deficit within 5.5 percent of GDP. To achieve this goal, a 12‑month digital tax monitoring system will be implemented to strengthen tax administration. Moreover, state governments will receive an additional 1.3 trillion rupees in grant assistance to promote center‑state cooperation.

The specially constituted Central Economic Policy Commission has drafted a five‑stage implementation plan. In the first stage, legislative changes will be passed in Parliament, while the second stage will issue directives to all relevant ministries. The third stage will involve quarterly reviews by independent audit agencies, enabling transparent assessment of the plan's progress. The fourth stage will encourage public‑private partnership (PPP) models to attract investors. Finally, the fifth stage will make necessary amendments based on social impact assessment.

Economic experts believe that if the proposed measures are implemented on time, India's GDP growth rate could rise from 7.2 percent to 8.0 percent over the next two years, leading to significant improvements in job creation. Additionally, transparency in the tax structure and investment in digital infrastructure are expected to boost foreign direct investment (FDI) by 15 percent. The government has established a continuous monitoring mechanism to align the policy with the national development agenda, ensuring policy flexibility. Overall, the new economic policy strengthens the central government's development‑oriented direction and will help achieve the country's long‑term economic goals.