New Delhi, February 2025 – Finance Minister Srimati Nirmala Sitharaman presented the Union Budget 2025-26, laying out a strategic roadmap for economic acceleration, inclusive growth, and private sector investment under Prime Minister Narendra Modi’s leadership. The budget aims to reinforce India’s position as the fastest-growing major economy through taxation reforms, power sector advancements, urban development, and infrastructure investments.
Key Highlights:
Economic Growth Strategies
- The budget aims to boost growth and investments, reinforcing India’s position as the fastest-growing major economy.
- The next five years are crucial for balanced growth in India, with an emphasis on structural reforms.
- Key focus areas include agriculture, MSMEs, and inclusive development.
Agriculture and Rural Development
- Agriculture identified as a primary growth engine, covering 100 districts and benefiting 1.7 million farmers.
- Multi-sectoral program to strengthen rural economy resilience.
- Government launches a six-year mission for pulse self-sufficiency.
- Agencies to procure from registered farmers for vegetables and fruits.
- Establishing a Makana Board in Bihar to support production and processing.
- Launch of high-yielding seeds mission to enhance research and commercial availability.
- Five-year mission to improve cotton farming productivity and sustainability.
- Three dormant urea plants reopened, with a new 12.7 lakh MT plant set up in Assam.
Boosting Manufacturing and MSMEs
- Government supports MSMEs with 5.7 crore units, generating 7.5 crore jobs, 36% of manufacturing, and 45% of exports.
- Investment limits for MSMEs increased to 2.5 times.
- Credit cover for micro and small enterprises raised from ₹5 crore to ₹10 crore, unlocking ₹1.5 lakh crore additional credit in five years.
- Startups' credit limit doubled to ₹20 crore with 1% guarantee fee.
- New fund of ₹10,000 crore for entrepreneurs and a dedicated fund of funds for startups.
- Scheme to enhance India’s footwear sector, creating employment for 22 lakh individuals.
Infrastructure and Energy Sector Expansion
- Monetization plan for 2025-2030 targeting ₹10 lakh crore in investment.
- Urban Challenge Fund of ₹1 lakh crore announced for city development projects.
- ₹25,000 crore corpus set up for maritime sector development.
- Expansion of air connectivity under the modified Udan scheme, linking 220 new destinations.
- Expansion of Patna Airport’s capacity discussed.
- 50,000 dwelling units completed, with an additional 40,000 to be completed by 2025.
- Establishing a ₹15,000 crore blended finance facility for 1 lakh housing units.
- ₹20,000 crore allocated for small modular reactors by 2033 to enhance nuclear energy capacity.
Health and Education Initiatives
- Saksham Anganwadi program supports 8 crore children and mothers.
- Broadband connectivity to all government schools and health centers under BHARATH-NET.
- Five new centers of excellence for skilling youth with global expertise.
- AI Center for Education launched with ₹500 crore funding.
- Medical education seats increased by 130% in the past decade, with 10,000 additional seats planned for next year and 75,000 over five years.
- 68 lakh street vendors benefited from Vanithi scheme.
- Government to provide identity cards and healthcare access for 1 crore gig workers.
Tax and Investment Reforms
- New income tax bill proposed next week.
- FDI limit raised to 100% for the insurance sector.
- Companies investing fully in India will have enhanced benefits.
- Knap Fit to establish credit facility for corporate bonds.
- Grameen credit score framework introduced for rural financial inclusion.
- Central KYC registry to roll out in 2025 to streamline identity verification.
Regulatory and Fiscal Policy Reforms
- High-level committee for regulatory reforms to be established.
- Streamlined system for fast-track mergers proposed for 2024.
- Investment-friendliness index to be launched in 2025.
- Revised fiscal deficit projected at 4.8% of GDP for 2024-25.
- Total expenditure revised to ₹47.16 lakh crore.
Customs and Tariff Structure Adjustments
- Seven tariff rates removed, leaving only eight zero rates.
- Exemption proposed for 82 tariff lines and 36 life-saving drugs.
- BCD scrapped on lithium-ion batteries and cobalt powder.
- Two new shuttle-less room types added to the exemption list.
Import Regulations and Export Promotion
- BCD reduction proposed for LCD, LED TVs, and battery components.
- BCD on Ethernet switches lowered from 20% to 10%.
- Exemption of crust leather from 20% export duty.
- Import input usage period extended from six months to one year.
New Income Tax Bill & Direct Tax Proposals
- The bill simplifies tax laws to reduce litigation and compliance burdens.
- Government under PM Modi committed to addressing citizen concerns through streamlined taxation policies.
- Personal income tax reforms focus on middle-class taxpayers.
- TDS rationalization proposed to simplify tax deduction processes.
- Senior citizens’ interest deduction limit doubled to ₹1 lakh.
- TCS threshold raised from ₹7 lakh to ₹10 lakh.
- Taxpayers can now claim deductions on two self-occupied properties.
- Tax rate reductions across income slabs, benefiting middle-class households.
Conclusion
With an expansive roadmap covering structural reforms, investment-led growth, and economic modernization, the Budget 2025-26 is designed to elevate India's global competitiveness. Finance Minister Sitharaman emphasized that these measures will pave the way for sustained development, employment generation, and financial resilience, ensuring prosperity for all.“With this, I commend the budget to this August House.”
