Impact of Taxation Policies of the Union Budget on Economic Growth in India

Abstract Taxation is one of the most influential policy instruments through which the government shapes economic behaviour and economic growth. In a developing economy like India, taxation policies announced through the Union Budget play a crucial role in revenue mobilisation, consumption patterns, investment decisions, and long term economic stability. The Union Budget acts as the primary platform where changes in tax rates, exemptions, compliance mechanisms, and structural tax reforms are introduced with the objective of supporting economic growth. This study examines the impact of taxation policies introduced through the Union Budget on economic growth in India. The focus of the study is specifically on taxation related measures, including direct taxes, indirect taxes, tax compliance initiatives, and tax efficiency indicators. The study analyses how changes in taxation policy influence key economic growth indicators such as gross domestic product growth, tax to GDP ratio, and revenue performance. The research is based on secondary data collected from Union Budget documents, Economic Survey reports, and official tax statistics. The findings indicate that taxation reforms aimed at simplification, compliance, and broadening of the tax base have supported economic growth by creating a stable and predictable fiscal environment. The study highlights that taxation contributes to growth indirectly by strengthening fiscal capacity and reducing uncertainty in the economy. Key words Union Budget, Taxation Policy, Economic Growth, Tax Compliance India