The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, sets the course for India’s economic growth and fiscal management in the coming year. With a strong focus on taxation relief, infrastructure development, social welfare, and digital transformation, this budget aims to drive sustainable progress while ensuring financial inclusion.
Economic Overview and Fiscal Policy
The government has projected a fiscal deficit of 4.4% of GDP, aiming for a gradual reduction from the previous year’s 4.8%. Total expenditure is estimated at ₹50.65 lakh crore, with expected tax revenues of ₹28.37 lakh crore. Borrowings for the fiscal year are set at ₹11.54 lakh crore, emphasizing a strategy to manage public debt efficiently.
Agriculture and Rural Development
Recognizing the vital role of agriculture in India’s economy, the budget introduces several initiatives:
- PM Dhan-Dhaanya Krishi Yojana: This scheme will be implemented across 100 agricultural districts to enhance productivity and promote sustainable farming practices.
- Boost to Pulses Production: A six-year self-reliance mission will focus on increasing the domestic yield of pulses like Tur, Urad, and Masoor, reducing reliance on imports.
- Expansion of Kisan Credit Card (KCC) Limits: The loan cap for KCC has been increased from ₹3 lakh to ₹5 lakh, offering better financial support to farmers.
- Irrigation and Post-Harvest Infrastructure: Investments will be made in rural irrigation and storage facilities to reduce crop wastage and improve food security.
Support for MSMEs and Startups
Micro, Small, and Medium Enterprises (MSMEs) and startups receive significant backing in this budget:
- Revised MSME Classification: The investment and turnover limits for MSMEs have been raised to encourage expansion and job creation.
- Enhanced Credit Guarantee Scheme: Increased funding for MSMEs will help improve access to affordable loans.
- Startup Incentives: Tax benefits for startups have been extended until March 2030, promoting entrepreneurship.
- Customized Credit Cards for Micro Enterprises: A new initiative will provide credit cards with a ₹5 lakh limit to small businesses.
Infrastructure and Energy Reforms
To accelerate economic growth, substantial investments have been allocated to infrastructure and energy sectors:
- ₹1.5 lakh crore interest-free loan scheme for states to develop infrastructure projects, focusing on transportation and urban planning.
- Maritime Development Fund of ₹25,000 crore to enhance India’s shipping and port facilities.
- Nuclear Energy Mission with a ₹20,000 crore allocation to support the development of Small Modular Reactors (SMRs), boosting clean energy production.
- Renewable Energy Push: Increased funding for solar and wind energy projects, supporting India’s commitment to sustainable development.
Taxation Reforms and Benefits
The government has introduced significant changes to income tax slabs to provide relief to individuals:
- Up to ₹4 lakh – No tax
- ₹4 lakh to ₹8 lakh – 5% tax
- ₹8 lakh to ₹12 lakh – 10% tax
- ₹12 lakh to ₹16 lakh – 15% tax
- ₹16 lakh to ₹20 lakh – 20% tax
- ₹20 lakh to ₹24 lakh – 25% tax
- Above ₹24 lakh – 30% tax
Individuals earning up to ₹12 lakh annually will pay zero tax due to enhanced rebates and deductions. These changes are expected to increase disposable income, boosting consumer spending and economic growth.
Social Welfare and Employment Initiatives
The budget places a strong emphasis on employment generation and social security:
- 50,000 Atal Tinkering Labs will be set up in schools to promote innovation and STEM learning.
- Expansion of IITs and medical colleges, with an additional 10,000 new medical seats to strengthen healthcare education.
- Health Coverage for Gig Workers: Online platform workers will now be covered under PM Jan Arogya Yojana, ensuring better health benefits.
- PM SVANidhi Scheme Expansion: Higher loan amounts for street vendors to support their businesses and financial stability.
Technology and Digital Growth
India’s digital economy receives a major boost with several initiatives:
- AI Centers of Excellence: A ₹500 crore allocation for research and innovation in Artificial Intelligence for education and industry applications.
- 5G Infrastructure Development: Additional incentives for telecom companies to expand 5G services nationwide.
- National Digital Public Infrastructure: Support for fintech, e-governance, and smart city projects to enhance efficiency and transparency.
Conclusion
The Union Budget 2025-26 outlines a strategic roadmap to accelerate India’s economic development while ensuring financial inclusion and sustainability. With major tax benefits, infrastructure investments, and technology-driven growth, the government aims to propel India toward becoming a $5 trillion economy in the near future.
