Sweetened Tax Slabs, Troubling Tariff Talk And The Fed Meet: Week That Was

Taking the center stage this week is the Union Budget 2025 that took place today. The Budget, an important domestic cue that signals the way ahead for sectors, investors and citizens, came with a wide array of changes. With specific focus on the middle class, tax slabs have been expanded in the new tax regime to provide further relief for the tax payers.

Global cues have been both mixed and concerning thanks to Trump's tariff talks in order to make America rich again. With other economic stances like the unchanged rates from Fed that came in this week, NDTV Profit, in its weekly news wrap, brings you the major events shaping businesses, industries and global markets.

The sweetest change made in the speech had to be the expansion of tax slabs under the new tax regime. With an increased rebate to Rs 12 lakh and the tax exemption raised to Rs 12,75,000, the changes were specifically aimed to provide relief to the middle class. Additionally, the new income tax bill is set to come in next week, according to Finance Minister Nirmala Sitharaman.

The government kept the fiscal deficit under control. For fiscal 2025, total receipts are projected at Rs 31.47 lakh crore, with net tax receipts at Rs 25.5 lakh crore. The government also introduced several significant updates aimed at boosting the MSME sector. Investment limits for MSMEs will be increased by 2.5 times, and turnover limits will be doubled, announced the finance minister.

Further, the key ambition is to make India a global hub for toy manufacturing, as per the Minister's speech. A National Institute of Food Technology and Management is set to be established in Bihar to strengthen the food processing industry.

Additionally, a National Manufacturing Mission will be set up to promote the growth of industries of all sizes — small, medium, and large.

US President Donald Trump has called for more tariffs to be imposed on a wide range of imports, including oil and metals, in the coming months. This is aimed to expand his plans to enact sweeping trade levies. This is also set to hit China, Canada and Mexico in the coming week.

Trump has previously pledged sectoral tariffs on various things like chips, pharmaceuticals, steel, aluminum and copper, as a bid to reshape supply chains and force manufacturers to shift production to the US. Trump's tariff talks have gotten markets and sectors worried as these changes have no specific date of action.

The US central bank had decided to maintain its benchmark interest rate after cutting it three times in a row. This marks the committee's first policy meeting since Donald Trump assumed office as US president on Jan. 20.

In the last policy meeting, in December, the Federal Open Market Committee had reduced the federal funds rate target by 25 basis points, bringing it to a range of 4.25% to 4.5%. Federal Reserve Chair Jerome Powell said officials are not in a hurry to lower interest rates, adding that the central bank is pausing to see further progress on inflation, following a string of rate reductions last year. He added that the current rate was still meaningfully above the so called neutral rate, which doesn’t stimulate or restrict economic activity.

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