Union Budget 2025-2026: Key Highlights
Jasmeen Gayas
Lloyd Law College
On 1st February 2025, Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the budget for 2025 to parliament. Quoting the famous saying by Telugu poet and playwright Shri Gurajada Appa Rao, "A country is not just its soil; a country is its people." The theme of the budget was “Sabka Vikas” to promote the balanced growth of all regions. The key focus is on inclusive development, boosting middle-class spending, and accelerating growth.
The budget proposed development measures focusing on Garib, Youth, Annadata, and Nari. The budget highlights the journey of development, focusing on agriculture, MSME, investment, and exports as engines of development and using reforms as fuel, guided by the spirit of inclusivity.
Key Highlights:
Budget Estimates 2025-2026
· The total receipts are estimated to be ₹34.96 lakh crores and expenditures are estimated to be ₹50.65 lakh crores.
· The Fiscal Deficit in 2025-2026 is estimated to be 4.4% of GDP and the Revenue deficit in 2025-26 is expected to be 1.5% of GDP
· Capital Expenditure of ₹11.21 lakh crores (3.1 of GDP) has been allocated for the financial year 2025-2026.
· The gross market borrowings are estimated to be ₹ 14.82 lakh crore.
· Net tax receipts are estimated to be ₹28.27 lakh crore.
Taxation and Finance
· No income tax up to ₹12 lakhs: New slab rates benefit middle-class taxpayers. The limit will be ₹12.75 lakh for salaried taxpayers.
· New Income Tax Bill: To be introduced next week, retaining half of the existing provisions
· TDS on Senior Citizens: ₹1 lakh plus on interest; TDS on Rent: ₹6 lakh onwards
· Compliance Burden Reduced: Small charitable trust’s registration period increased from 5 to 10 years
· Direct tax revenues of around ₹1 lakh crore will be foregone and indirect tax removes 7 tariff rates, there will be only eight tariff rates including zero rates.
New Tax Regime
0-4 lakh rupees
Nil
4-8 lakh rupees
5%
8-12 lakh rupees
10%
12-16 lakh rupees
15%
16-20 lakh rupees
20%
20-24 lakh rupees
25%
Above 24 lakh rupees
30%
Education and Skill Development
· Centre of Excellence in AI: To be set up for education with an outlay of ₹500 crore
· 10,000 Fellowships: Under the PM Research Fellowship scheme for research
· 50,000 Atal Tinkering Labs: In the next 5 years, labs will be established in government schools
· National Centers of Excellence: 5 Centre of excellence to be set up with global expertise
· Expansion of medical education: 10,000 additional seats with the target of adding 75,000 seats in the next 5 years.
Infrastructure and Development
· Urban Challenge Fund: ₹1 lakh crore would be spent to transform cities into growth hubs
· Modified UDAN Scheme: To connect 120 new destinations, catering to 4 crore passengers
· Western Kosi Canal Project: Financial assistance to be provided in Bihar
Healthcare and Social Welfare
· Cancer Hospital in Every District: 200 centers to be set up in every district hospital
· Saksham Anganwadi and Poshan 2.0: Nutritional support to 8 crore children, 1 crore mothers, and 20 lakh adolescent girls
· Medical Tourism and “Heal in India”: Will be promoted in collaboration with the private sector
Agriculture and Fisheries
· Dhan Dhanya Krishi Yojna: Scheme to cover 100 districts, b benefiting 1.7 crore farmers
· National Institute of Food Technology: To be set up in Bihar
· Marine Sector Development: Enabling framework of sustainable harnessing of fisheries
· Mission for Cotton Productivity: 5-year mission aimed to support improvements in the productivity and sustainability of cotton farming.
· Enhanced Credit through KCC: Enhanced the loan limit from ₹3 lakhs to ₹5 lakhs through the Kisan credit card.
Industry, MSME, and Startup
· Credit Cards for Micro-enterprises: The Udyam portal enrolled micro-enterprises with customized credit cards of up to ₹5 lakhs. A total of 10 lakh cards are likely to be given in the very first year itself.
· Scheme for First-Time Entrepreneurs: A new scheme has been announced for 5 lakh women, Scheduled Castes, and Scheduled Tribes first-time entrepreneurs, aimed at providing term loans of up to ₹ 2 crores over the next five years.
Modification in classification criteria for MSMEs
₹ in Crore
Investment
Turnover
Current
Revised
Current
Revised
Micro Enterprises
1
2.5
5
10
Small Enterprises
10
25
50
100
Medium Enterprises
50
125
250
500
Export and Trade Promotion
· Export Promotion Mission: Aims to facilitate access to export credit, cross-border factoring, and MSME assistance for non-tariff measures in overseas markets.
· BharatTradeNet: A single digital platform for international trade will be set up and it facilitates trade documentation and provides financial solutions, to make integration with Global Supply Chains easy.
· National Framework for GCC: State support to encourage Global Capability Centres in Tier 2 cities.
· Warehousing facility for air cargo: Enhance warehousing and infrastructure for air cargo, including horticulture.
Other Key Announcements
· Insurance FDI Hiked: Raised from 74% to 100%
· Jan Vishwas Bill 2.0: Decriminalizing over 100 provisions across various laws.
· Fastrack Merger for Companies: Simplified process
· Revamped Central KYC registry to be rolled out in 2025
· National Geospatial Mission: To establish foundational geospatial infrastructure and data.
Budget Allocation Overview
Deficit Trends: Fiscal Deficit projected at 4.4% of GDP, Revenue Deficit at 1.5%.
Sectoral Allocations:
Education: ₹2.66 lakh crore
Rural Development: ₹1.28 lakh crore
Defense: ₹4.91 lakh crore
Health: ₹98,311 crore
Energy: ₹81,174 crore
Agriculture and Allied Activities: ₹1.71 lakh crore
Conclusion
The budget is a comprehensive vision of India’s future. It presents progressive and inclusive growth and sustainable development. The budget focuses on infrastructure, taxation reforms to social welfare, and agriculture. This budget paves the way for a stronger, more resilient economy.
It focuses on the empowerment of all sections of society, especially farmers, MSMEs, and entrepreneurs, which will eventually make for a 'Viksit Bharat.' As India progresses, the budget works to build a strong economy that is sustainable for the long term.
Reference
1. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2098353
2. https://www.indiabudget.gov.in/