Finance Minister Nirmala Sitharaman, along with new Reserve Bank of India (RBI) Governor Sanjay Malhotra and members of the Central Board of Directors (CBD), will be holding their customary post-Budget meeting. This meeting is scheduled for 12 noon on February 8, 2025 and is expected to address key points concerning the nation's fiscal health and monetary policy.

After the meeting, Sitharaman, Malhotra, and other CBD members will address the media, likely offering insights into how India’s budgetary decisions and monetary policy stance will work in tandem to address the nation's economic challenges.

The post-Budget meeting holds significance as it is expected to align the government's fiscal policy with the RBI's monetary policy under the leadership of Governor Malhotra, who assumed office recently.

Cabinet Approves New Income-Tax Bill

In another crucial development, the Union Cabinet has approved the new Income-Tax (I-T) Bill that was proposed by FM Nirmala Sitharaman in her Budget speech on February 1, 2025. This new bill is set to replace the over 60-year-old Income-Tax Act, 1961 and will provide taxpayers with a simpler and more transparent tax framework.

The new I-T bill is aimed at simplifying tax regulations, making them more easy to understand, and ensuring tax certainty while reducing litigation. The bill is expected to be introduced in Parliament in the coming week and may be referred to a parliamentary committee for further discussions and refinement.

This development aligns with the government’s broader regulatory reforms which seek to bring the Indian taxation system in line with global best practices while making it more accessible to taxpayers.

RBI Announces First Rate Cut in Five Years

The Reserve Bank of India (RBI) also took action to support the economy, announcing its first repo rate cut in five years. Under the leadership of Governor Malhotra, the Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points, bringing it down from 6.50% to 6.25%.

This marks the first reduction since May 2020, following a period of consecutive interest rate hikes that lasted through 2023. The rate cut is aimed at stimulating growth amid slower economic expansion.

The RBI's growth projection for the fiscal year ending March 31, 2025, has been set at 6.4%, the lowest in four years, down from 6.6% previously projected. In contrast, inflation has been pegged at 4.8%.

The rate cut is expected to bring relief to borrowers and improve liquidity in the economy, while also encouraging investments and consumption to support the country's growth.

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