A Budget for Growth and Inclusivity
Finance Minister Smt. Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament, emphasizing the theme “Sabka Vikas” (Development for All). She quoted Telugu poet Gurajada Appa Rao, stating that “A country is not just its soil; a country is its people,” reinforcing the government’s commitment to balanced regional growth.
The broad principles of Viksit Bharat outlined in the budget include:
- Eradicating poverty
- Ensuring quality education for all
- Providing high-quality, affordable healthcare
- Skilling the workforce with meaningful employment opportunities
- Increasing women’s participation in economic activities (70%)
- Strengthening the agricultural sector to make India the “food basket of the world”
The budget aims to accelerate economic growth, boost private sector investments, uplift the middle class, and ensure inclusive development while focusing on poor (Garib), youth, farmers (Annadata), and women (Nari). Key areas of transformation include taxation, power sector, urban development, mining, financial sector, and regulatory reforms.
Four Growth Engines for Viksit Bharat
1st Engine: Agriculture
To strengthen the agricultural sector, the government announced the ‘Prime Minister Dhan-Dhaanya Krishi Yojana’, covering 100 districts to improve productivity, diversify crops, enhance irrigation, and increase access to credit.
Other initiatives include:
- ‘Rural Prosperity and Resilience’ Programme to tackle underemployment through skilling, technology, and investment.
- Six-year ‘Mission for Aatmanirbharta in Pulses’ focusing on Tur, Urad, and Masoor with procurement by National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and National Cooperative Consumers’ Federation of India Ltd. (NCCF) for four years.
- New initiatives such as the Comprehensive Programme for Vegetables & Fruits, National Mission on High Yielding Seeds, and Mission for Cotton Productivity.
- Increased loan limits for Kisan Credit Cards (KCC) from Rs. 3 lakhs to Rs. 5 lakhs.
2nd Engine: MSMEs
Recognizing MSMEs as a crucial driver of exports (45%), the government announced:
- Higher investment and turnover limits for MSMEs (2.5 and 2 times higher, respectively) to improve scalability and access to capital.
- Enhanced credit availability and guarantee cover.
- New scheme for first-time entrepreneurs from SC/ST and women, offering term loans up to Rs. 2 crore for five years.
- A National Manufacturing Mission covering small, medium, and large industries to further “Make in India.”
- A dedicated scheme to make India a global hub for toy manufacturing.
3rd Engine: Investment
Investment in People, Economy, and Innovation is a top priority:
- Investment in People
- 50,000 Atal Tinkering Labs in government schools over five years.
- Broadband connectivity for all government secondary schools and primary health centers under BharatNet.
- Bharatiya Bhasha Pustak Scheme to provide digital books in Indian languages.
- Five National Centres of Excellence for Skilling to align with “Make for India, Make for the World.”
- Centre of Excellence in AI for Education with Rs. 500 crore outlay.
- Gig workers’ identity cards and healthcare under PM Jan Arogya Yojana.
- Investment in Economy
- Infrastructure projects in PPP mode with a three-year pipeline.
- Rs 1.5 lakh crore interest-free loans for states’ capital expenditure and reforms.
- Second Asset Monetization Plan 2025-30 to generate Rs. 10 lakh crore for new projects.
- Jal Jeevan Mission extended till 2028 for rural piped water supply.
- Urban Challenge Fund of Rs.1 lakh crore to modernize cities.
- Investment in Innovation
- Rs 20,000 crore allocated for private sector-driven R&D initiatives.
- National Geospatial Mission for better urban planning.
- Gyan Bharatam Mission for manuscript preservation and a National Digital Repository of Indian Knowledge Systems.
4th Engine: Exports
- Export Promotion Mission for MSMEs.
- BharatTradeNet (BTN) to digitize trade documentation and financing.
- Support for domestic manufacturing in Industry 4.0.
- Infrastructure development for air cargo and warehousing to boost perishable exports.
Reforms as the Fuel
The government is focusing on taxpayer convenience, ease of doing business, and financial sector reforms, including:
- Higher FDI limit in insurance (74% to 100%), provided investments stay in India.
- High-Level Committee for Regulatory Reforms to ease compliance and boost trust in governance.
- Investment Friendliness Index for States to promote competitive federalism.
- Jan Vishwas Bill 2.0 to decriminalize over 100 legal provisions.
Fiscal Deficit
- Revised Estimate (2024-25): 4.8% of GDP
- Budget Estimate (2025-26): 4.4% of GDP
- Total Expenditure (2025-26): Rs 50.65 lakh crore
- Net Tax Receipts (2025-26): Rs 28.37 lakh crore
PART B: Tax Reforms
Personal Income Tax Relief
- No income tax for income up to Rs 12 lakh per annum.
- Salaried individuals earning up to Rs 12.75 lakh to pay NIL tax (due to a Rs. 75,000 standard deduction).
- Revised Tax Slabs:
- Rs 0 – 4 Lakh: NIL
- Rs 4 – 8 Lakh: 5%
- Rs 8 – 12 Lakh: 10%
- Rs 12 – 16 Lakh: 15%
- Rs 16 – 20 Lakh: 20%
- Rs 20 – 24 Lakh: 25%
- Above Rs 24 Lakh: 30%
TDS/TCS Reforms
- TDS limit on senior citizen interest income doubled to Rs 1 lakh.
- TDS threshold on rent raised from Rs 2.4 lakh to Rs 6 lakh per annum.
Encouraging Voluntary Compliance
- Extended time limit to file updated returns from two years to four years.
- Tax benefits for charitable trusts and senior citizens.
Customs Duty Changes
- Exemption for 36 life-saving drugs and 37 additional medicines.
- BCD exemptions on critical minerals, EV battery components, and shipbuilding raw materials.
- Duty adjustments to boost domestic manufacturing and “Make in India.”
A Budget for the Middle Class and Growth
The government emphasized that Democracy, Demography, and Demand are key pillars of the Viksit Bharat journey. The middle class plays a crucial role, and the tax relief measures aim to boost consumption, savings, and investment.
The Union Budget 2025-26 is a roadmap towards a self-reliant, inclusive, and globally competitive India, ensuring growth, employment, and prosperity for all.