The Union Budget for 2025-26 was presented by Finance Minister Nirmala Sitharaman on February 1, 2025. The Economic Survey 2024-25 predicts India’s GDP growth to range between 6.3% and 6.8% in 2025-26, bolstered by strong private consumption and investment. In her address, President Droupadi Murmu outlined the Government’s ambitious goals for economic growth, digital transformation, and social welfare, highlighting a quickened pace of decision-making and reform implementation.
The budget includes significant allocations and reforms across multiple sectors, with total receipts projected at ₹34.96 lakh crore and expenditure at ₹50.65 lakh crore, bringing the fiscal deficit to 4.4% of GDP. The government also forecasts a gross market borrowing of ₹14.82 lakh crore. Key measures include the introduction of a ₹11.21 lakh crore capital expenditure program, and several initiatives targeting agriculture, MSMEs, education, and infrastructure.
Agriculture and Rural Development Initiatives: A variety of programs aim to boost agriculture and rural prosperity. Notably, the Prime Minister’s Dhan-Dhaanya Krishi Yojana will focus on developing agricultural districts and enhancing food security through targeted schemes for pulses, vegetables, and fruits. Other initiatives include the establishment of a Makhana Board in Bihar and a new mission for cotton productivity.
MSMEs and Employment Growth: The budget focuses on strengthening MSMEs, offering expanded credit options and setting up a ₹10,000 crore Fund of Funds to support startups. The government has also unveiled a scheme for first-time women, SC, and ST entrepreneurs and further support for the footwear and leather sectors.
Investment and Infrastructure Expansion: The government aims to invest heavily in infrastructure with an emphasis on Public-Private Partnerships (PPP). This includes a ₹1.5 lakh crore allocation for interest-free loans to states, a new urban development fund, and major initiatives in transport, such as a modified UDAN scheme to enhance regional connectivity. The nuclear energy sector will also see growth with a focus on Small Modular Reactors.
Education and Skilling: A comprehensive push for education includes the setting up of 50,000 Atal Tinkering Labs and 5 National Centres of Excellence for skilling. The government will also increase medical education capacity by adding 10,000 seats in medical colleges and establishing Day Care Cancer Centres in district hospitals.
Direct Taxation Reforms: Direct taxes will undergo a major overhaul with an increase in the income tax exemption limit up to ₹12 lakh, benefiting the middle class. The revised tax slabs aim to reduce burdens, and several measures to simplify compliance and reduce litigation are part of the reform package.
Indirect Tax Measures: The budget also outlines changes in customs duties, including exemptions and reductions on a variety of goods like critical minerals, textiles, and electronic components, designed to support domestic manufacturing and exports.
This budget is set to drive India’s growth with a focus on inclusive development, innovation, and enhanced economic self-reliance.