Budget 2025 Expectations:The government may announce increase in import duty in the Union Budget to be presented on February 1. This step can be taken with the aim of controlling the demand for dollars and controlling the continuously falling value of rupee. This estimate has been expressed by veteran economist and Chief Policy Advisor of EY, DK Srivastava. He believes that if the government takes any step in this direction, it will not only provide security to India’s domestic industry, but can also increase government revenue through increased import duty. It is noteworthy that there is a continuous decline in the Indian Rupee against the Dollar, due to which the economy has to face many challenges.
Also read: ITR filing deadline: Today is the last chance to file revised return of income tax, claim exemption of Section 87A before the deadline.
Rupee decline government andChallenge for RBI
According to DK Srivastava, the falling value of rupee is a big challenge for both the government and the Reserve Bank of India (RBI). On January 13, 2025, the rupee reached a historic low of 86.70 against the dollar, which was the biggest fall in the last two years. Srivastava says that increasing the import duty will reduce the demand for dollars from importers and this will reduce the pressure on the rupee.
Also read: Stallion India IPO: Stallion India Fluorochem IPO opening on January 16, every important detail including GMP, offer size, price band and listing.
Domestic industries will get a boost
Srivastava also said that not only the Indian rupee, but many currencies of Europe are also facing similar pressure against the dollar. He said, “There is no effective way in the budget which can directly affect the currency exchange rates, but the government can consider increasing the tariff rates. This will not only provide protection to the domestic industry, but will also prevent increase in import duty.” This will also increase the government’s earnings.”
Also read: Equity investment in this hybrid scheme of SBI Mutual Fund is less than 25%, yet the average return of 5 years is above 11%, should you invest?
Steps towards self-reliant India
Srivastava says that the step of increasing import duty can also prove effective in strengthening the government’s ‘Self-reliant India’ campaign. Because reduction in demand for imported goods will boost domestic production. Keeping all these aspects in mind, the government can move towards increasing tariffs and rationalizing duties.”
Also read: Liquid FD: You can withdraw money from this FD of Bank of Baroda like a savings account, how much interest will you get?
Future signs and challenges
There has been a huge decline in the Indian currency in the last few days. On January 13, 2025, the rupee fell by 66 paise and closed at a historic low of 86.70 against the US dollar. This was the biggest fall of the rupee seen in any single day in the last two years. Earlier, the biggest one-day fall in the rupee was 68 paise, which was seen on 6 February 2023. In the last two weeks alone, the rupee has fallen by more than Re 1 against the dollar. On December 19, 2024, the Indian currency fell below the level of Rs 85 per dollar for the first time.
Also read: Rupee Fall Impact: What will be the effect of fall in rupee? 5 big things affecting your pocket, economy and investment
Due to the continuous decline seen in the rupee, it will be a challenging task for the government to strike a balance between fiscal and monetary policy in the upcoming budget. In such a situation, the step of possible increase in import duty can be a relief to the government. However, this will also pose a danger of increasing difficulties for import dependent industries. In such a situation, the government will have to consider all the aspects related to it before taking any step.
