Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 with a vision to transform India into a developed economy.
Introduction
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 with a vision to transform India into a developed economy (Viksit Bharat) by 2047. The budget focuses on economic growth, social welfare, infrastructure, taxation reforms, MSME support, agriculture, and rural development while navigating global challenges.
Key Themes and Objectives
The budget outlines four engines of growth:
- Agriculture
- MSMEs
- Investment
- Exports
Additionally, it sets six transformative reform areas:
- Taxation
- Power Sector
- Urban Development
- Mining
- Financial Sector
- Regulatory Reforms
1. Agriculture & Rural Development
Prime Minister Dhan-Dhaanya Krishi Yojana
- Aims to develop 100 agricultural districts with a focus on improving irrigation, productivity, crop diversification, and financial support.
- 1.7 crore farmers will benefit from this initiative.
Pulses and Seed Security
- A 6-year plan for pulses self-sufficiency covering Tur, Urad, and Masoor.
- National Mission on High-Yielding Seeds to develop climate-resilient and pest-resistant seeds.
Support for Farmers
- Kisan Credit Card (KCC) limit increased from ₹3 lakh to ₹5 lakh.
- New Urea Plant in Assam to enhance fertilizer production.
- India Post to be restructured as a logistics and financial hub for rural India.
Vegetables, Fruits, and Cotton Productivity
- Comprehensive Programme for Vegetables & Fruits to ensure stable prices and efficient supply chains.
- Makhana Board in Bihar for boosting makhana production.
- Mission for Cotton Productivity to support extra-long staple cotton farming.
2. MSMEs & Entrepreneurship
Revised MSME Classification & Credit Expansion
- Investment and turnover limits increased (2.5x investment, 2x turnover) to enable better scaling.
- Credit limit increases:
- Micro & Small Enterprises: ₹5 crore → ₹10 crore.
- Startups: ₹10 crore → ₹20 crore.
- 10 lakh micro enterprises to receive ₹5 lakh MSME credit cards.
- Fund of Funds for Startups expanded with an additional ₹10,000 crore.
Sector-Specific Support
- Toy Manufacturing, Leather, and Footwear Sectors to receive targeted support.
- New National Institute for Food Technology in Bihar to boost food processing.
Women & SC/ST Entrepreneur Support
- 5 lakh first-time women and SC/ST entrepreneurs will receive term loans up to ₹2 crore.
3. Investment & Infrastructure
Capital Expenditure and Urban Development
- ₹1.5 lakh crore allocated as 50-year interest-free loans to states.
- Urban Challenge Fund (₹1 lakh crore) for city redevelopment, water, and sanitation projects.
- Smart Cities & Metro Rail expansion.
Energy & Power Sector
- ₹20,000 crore allocated for Small Modular Reactors (SMR) under the Nuclear Energy Mission.
- Electricity distribution reforms with incentives for states.
- ₹25,000 crore Maritime Development Fund to boost shipbuilding and coastal trade.
Tourism & Housing
- ₹50,000 crore investment in 50 key tourist destinations.
- SWAMIH Fund 2 (₹15,000 crore) for completing 1 lakh affordable housing units.
Transportation & Connectivity
- Greenfield airport in Bihar.
- Western Koshi Canal Project to improve irrigation in Bihar.
- New UDAN scheme to connect 120 new destinations and boost regional connectivity.
4. Export Growth & Trade
Trade Promotion & BharatTradeNet
- Unified trade documentation & financing platform to ease exports.
- Easier access to credit & trade financing for exporters.
- Investment in air cargo warehousing to support perishable exports.
- National Framework for Global Capability Centres (GCCs) to promote IT services growth in Tier-2 cities.
5. Taxation Reforms
Personal Income Tax Reforms
- No tax for income up to ₹12 lakh.
- Revised income tax slabs:
- ₹0 – ₹4 lakh: Nil
- ₹4 – ₹8 lakh: 5%
- ₹8 – ₹12 lakh: 10%
- ₹12 – ₹16 lakh: 15%
- ₹16 – ₹20 lakh: 20%
- ₹20 – ₹24 lakh: 25%
- Above ₹24 lakh: 30%
Ease of Doing Business & Financial Sector Reforms
- 100% FDI allowed in insurance sector (with reinvestment in India).
- Central KYC Registry for streamlined verification.
- Jan Vishwas Bill 2.0 to decriminalize 100+ regulatory provisions.
6. Social Welfare & Employment
Education & Skilling
- 50,000 Atal Tinkering Labs in government schools.
- Broadband connectivity for all rural secondary schools & PHCs.
- 10,000 new medical seats in 2025.
Healthcare & Social Security
- 200 district hospitals to get Daycare Cancer Centres.
- PM Jan Arogya Yojana expanded to cover 1 crore gig workers.
Urban Livelihood & Housing
- PM SVANidhi scheme expanded with enhanced loans and UPI-linked credit cards.
- Strengthened urban employment schemes.
7. Fiscal Policy & Budget Estimates
Fiscal Deficit Targets
- 2024-25: 4.8% of GDP
- 2025-26: 4.4% of GDP
- Total Expenditure (2025-26): ₹50.65 lakh crore
- Net Tax Revenue: ₹28.37 lakh crore
- Market Borrowings: ₹11.54 lakh crore
Indirect Tax Reforms
- Customs tariff rationalization to reduce slabs and correct duty inversions.
- Tax benefits for electronics, shipbuilding, and lithium-ion battery production.
- Duty exemptions for pharmaceuticals & critical minerals.
Conclusion
The Budget 2025-26 is structured to strengthen agriculture, MSMEs, infrastructure, and exports, driving economic transformation and social welfare.
Leave a Reply