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The Central government is likely to increase its welfare spending on social schemes by Rs 50,000 crore in the upcoming budget, due to robust tax collection and record dividend from the Reserve Bank of India (RBI), according to the global brokerage Jefferies.

As per the report, the Central government will not face any economic challenges in carrying forward capital expenditure and development works in the coming budget. The government enjoys a financial cushion of approx 40 to 50 basis points.

Jefferies said that the budget for FY25 will have a positive impact on affordable housing, consumer companies, price-sensitive industries, and capex companies. 

Increasing income tax collection allows the government to give tax exemptions. This may provide relief to taxpayers. An increase in consumer spending will also support economic growth.

Jefferies suggested that India could bring back the Credit Linked Subsidy Scheme (CLSS) for urban housing.

Jefferies believes that the Budget for capital expenditure could be increased by Rs 30,000 crore and government welfare schemes spending could be increased by Rs 50,000 crore in the upcoming budget.