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Summary of Union Budget 2025-26


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Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presented the Union Budget 2025-26 in Parliament today. The budget, themed “Sabka Vikas” (Development for All), aims to stimulate balanced growth across all regions and sectors of the country. Drawing inspiration from Telugu poet Shri Gurajada Appa Rao’s words, “A country is not just its soil; a country is its people,” the budget focuses on inclusive development and transformative reforms.


Key Principles of Viksit Bharat

The Finance Minister outlined the following guiding principles for a developed India (Viksit Bharat):

  1. Zero Poverty
  2. 100% access to quality school education
  3. Affordable and comprehensive healthcare for all
  4. 100% skilled workforce with meaningful employment
  5. 70% women participation in economic activities
  6. Farmers transforming India into the ‘food basket of the world’

The budget emphasizes accelerating growth, ensuring inclusive development, boosting private investments, uplifting household sentiments, and enhancing the spending power of India’s middle class. It focuses on four key groups: Garib (Poor), Yuva (Youth), Annadata (Farmers), and Nari (Women).


Transformative Reforms

The budget proposes reforms across critical sectors, including:

  • Taxation
  • Power Sector
  • Urban Development
  • Mining
  • Financial Sector
  • Regulatory Reforms

These reforms aim to enhance India’s growth potential and global competitiveness.


Four Engines of Growth

The budget identifies Agriculture, MSMEs, Investment, and Exports as the four engines driving India’s journey to becoming a developed nation, fueled by reforms.


1st Engine: Agriculture

  1. Prime Minister Dhan-Dhaanya Krishi Yojana:
    • A program to boost productivity, crop diversification, post-harvest storage, and irrigation facilities in 100 low-productivity districts.
  2. Rural Prosperity and Resilience Program:
    • A multi-sectoral initiative to address rural underemployment through skilling, technology, and investment, focusing on women, youth, and small farmers.
  3. Mission for Aatmanirbharta in Pulses:
    • A 6-year mission to achieve self-reliance in Tur, Urad, and Masoor pulses. NAFED and NCCF will procure these pulses over the next 4 years.
  4. Comprehensive Program for Vegetables & Fruits:
    • A scheme to enhance production, supply chains, and farmer incomes.
  5. National Mission on High-Yielding Seeds:
    • Aimed at developing and commercializing over 100 high-yield seed varieties.
  6. Mission for Cotton Productivity:
    • A 5-year mission to improve cotton farming productivity and sustainability.
  7. Enhanced Credit through Kisan Credit Cards (KCC):
    • Loan limits under the Modified Interest Subvention Scheme increased from ₹3 lakh to ₹5 lakh.

2nd Engine: MSMEs

  1. Revised MSME Classification Criteria:
    • Investment and turnover limits for MSMEs increased by 2.5 and 2 times, respectively.
  2. Scheme for First-Time Entrepreneurs:
    • Term loans up to ₹2 crore for 5 lakh women, SC, and ST entrepreneurs over the next 5 years.
  3. Focus Product Scheme for Footwear & Leather:
    • A scheme to boost productivity, quality, and exports in the footwear and leather sectors.
  4. National Manufacturing Mission:
    • To further the “Make in India” initiative, covering small, medium, and large industries.
  5. India as a Global Toy Hub:
    • A scheme to promote high-quality, innovative, and sustainable toys.

3rd Engine: Investment

  1. Investing in People:
    • 50,000 Atal Tinkering Labs in government schools.
    • Broadband connectivity for all government secondary schools and primary health centers.
    • Expansion of medical education with 10,000 additional seats next year.
    • Day Care Cancer Centres in all district hospitals by 2028.
  2. Investing in the Economy:
    • ₹1.5 lakh crore interest-free loans to states for capital expenditure.
    • Asset Monetization Plan 2025-30 to generate ₹10 lakh crore for new projects.
    • Urban Challenge Fund of ₹1 lakh crore for city redevelopment and sanitation.
    • Nuclear Energy Mission with ₹20,000 crore for Small Modular Reactors (SMRs).
  3. Investing in Innovation:
    • ₹20,000 crore for private sector-driven R&D and innovation.
    • Deep Tech Fund of Funds to support next-gen startups.
    • National Geospatial Mission for foundational geospatial infrastructure.

4th Engine: Exports

  1. Export Promotion Mission:
    • A mission to help MSMEs tap into global markets, driven by Ministries of Commerce, MSME, and Finance.
  2. BharatTradeNet (BTN):
    • A unified digital platform for trade documentation and financing solutions.
  3. Support for Global Capability Centres (GCCs):
    • A national framework to promote GCCs in tier 2 cities.

Reforms as Fuel

The budget emphasizes reforms to drive growth:

  1. FDI in Insurance Sector:
    • FDI limit raised to 100% for companies investing premiums in India.
  2. Jan Vishwas Bill 2.0:
    • Decriminalization of over 100 provisions in various laws.
  3. High-Level Committee for Regulatory Reforms:
    • To review non-financial sector regulations and enhance ease of doing business.
  4. Investment Friendliness Index of States:
    • To promote competitive cooperative federalism.

Fiscal Consolidation

  • Fiscal Deficit for 2024-25 (Revised Estimate): 4.8% of GDP
  • Fiscal Deficit for 2025-26 (Budget Estimate): 4.4% of GDP

Direct Tax Reforms

  1. Tax Relief for Middle Class:
    • No income tax for incomes up to ₹12 lakh (₹12.75 lakh for salaried individuals with standard deduction).
    • Revised 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%
  2. TDS/TCS Rationalization:
    • Doubled TDS limit for senior citizens’ interest income to ₹1 lakh.
    • Increased TDS threshold on rent to ₹6 lakh.

Indirect Tax Reforms

  1. Customs Duty Rationalization:
    • Removal of seven tariff rates, leaving only eight rates.
    • Exemptions for 36 lifesaving drugs and concessional duty for 6 others.
  2. Support for Domestic Manufacturing:
    • Duty exemptions for critical minerals, EV battery components, and shipbuilding materials.

Conclusion

The Union Budget 2025-26 is a comprehensive roadmap for India’s journey towards becoming a developed nation. By focusing on inclusive growth, innovation, and reforms, the budget aims to empower every section of society and strengthen India’s position as a global economic powerhouse.

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