On February 1, 2025, Finance Minister Nirmala Sitharaman presented India’s Union Budget for the fiscal year 2025-26, focusing on stimulating economic growth, providing tax relief to the middle class, and enhancing various sectors.
Key Budget Announcements (2025-26)
1. Tax Proposals
Income Tax Reforms
- Tax-free slab increased to ₹12 lakh per annum (for individuals under the new tax regime).
- Lower tax rates on income up to ₹10 lakh and additional exemptions for the middle class.
Corporate Tax
- Tax holidays and incentives continue for small businesses & startups.
- Encouragement for new industries with sector-specific benefits.
GST Reforms
- GST exemption limit raised to ₹1 crore for small businesses.
- Compliance burden reduced for small businesses.
- Strict anti-tax evasion measures introduced to curb GST fraud.
2 . Fiscal Policy and Deficit
- Fiscal Deficit set at 4.4% of GDP, reduced from 4.8% in 2024, demonstrating fiscal prudence.
- Government aims for gradual deficit reduction while maintaining financial sustainability.
3. Infrastructure Development
Transport
- ₹3.5 lakh crore allocated for national highways, rural roads, and regional connectivity.
- Additional funding for regional airports & railway modernization to boost accessibility in Tier-2 & Tier-3 cities.
Urban Infrastructure
- ₹1 lakh crore allocated for urban development, smart cities, and housing (PMAY).
- Electric vehicle infrastructure and urban mobility solutions introduced.
4. Agriculture & Rural Development
- ₹80,000 crore allocated for rural development, including cold storage facilities.
- Incentives for organic farming, improved irrigation, and high-yield crop adoption.
- Crop insurance schemes for small farmers to mitigate climate risks.
Skill Development
- Programs for rural youth to develop skills in agriculture & local industries for job creation.
5. Healthcare & Social Welfare
Healthcare Budget
- Increased funding for Ayushman Bharat and telemedicine initiatives for rural areas.
- Mental health programs given priority for both urban and rural populations.
Social Welfare
- ₹10,000 crore allocated for social housing (focused on women & lower-income communities).
- Strengthening Anganwadi & Mid-Day Meal schemes to enhance nutrition levels.
6. Green Energy & Sustainability
- ₹50,000 crore for electric vehicles (EVs), renewable energy, and carbon capture technologies.
- New policies for sustainable mining & renewable technology development.
7. Digital & Technology Sector
Digital Infrastructure
- ₹20,000 crore allocated to expand 5G connectivity and digital governance.
Cybersecurity
- Increased investments in cybersecurity for banking, healthcare, and defense sectors.
8. Education & Skill Development
- ₹1.2 lakh crore allocated for higher education, skill development, and vocational training.
- Emphasis on online education to improve access for underserved regions.
Research & Innovation
- Funding allocated for AI, space technology, and quantum computing initiatives.
9. Private Sector & Investment
FDI Policies
- New policies to attract foreign investment in insurance, retail, and defense.
- Privatization of public sector enterprises and removal of bureaucratic hurdles for investors.
Startup Ecosystem
- ₹10,000 crore allocated for startups in biotech, green energy, and IT sectors.
10. Financial Sector Reforms
Banking Reforms
- Better credit access for MSMEs through public-private partnerships.
Stock Market Reforms
- Stronger investor protection measures and transparency improvements.
Conclusion
The Union Budget 2025-26 presents a balanced approach with strategic investments in infrastructure, healthcare, education, and private sector growth while ensuring fiscal discipline. The focus on green energy, digital transformation, and social welfare aims to drive long-term economic growth and position India as a global leader in innovation.
