Summary of India’s Union Budget 2025-26

On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2025-26, marking her eighth consecutive budget presentation. This budget emphasizes inclusive growth and development across various sectors, with a particular focus on the poor, youth, farmers, and women. Here’s a summary of the key highlights and initiatives announced in the budget.

Key Financial Projections

The Union Budget 2025-26 outlines significant financial estimates aimed at sustaining economic growth:

  • Total Receipts (excluding borrowings): ₹34.96 lakh crore
  • Total Expenditure: ₹50.65 lakh crore
  • Fiscal Deficit: Targeted at 4.4% of GDP
  • Capital Expenditure (Capex): ₹11.21 lakh crore (approximately 3.1% of GDP)

These figures reflect a balanced approach to fiscal management while facilitating necessary investments in infrastructure and social programs.

Major Initiatives and Reforms

  1. Income Tax Reforms: A significant highlight is the introduction of a new income tax regime where individuals earning up to ₹12 lakh will not have to pay any income tax. The revised tax slabs are as follows:
    • Up to ₹4 lakh: Nil
    • ₹4 lakh – ₹8 lakh: 5%
    • ₹8 lakh – ₹12 lakh: 10%
    • ₹12 lakh – ₹16 lakh: 15%
    • ₹16 lakh – ₹20 lakh: 20%
    • ₹20 lakh – ₹24 lakh: 25%
    • Above ₹24 lakh: 30%
    This change aims to ease the tax burden on the middle class and stimulate consumer spending.
  2. Agricultural Development: The government announced the PM Dhan-Dhaanya Krishi Yojana, which will focus on improving crop yields in 100 districts with low agricultural productivity. Additionally, a national mission for high-yielding seeds will be launched to enhance agricultural output.
  3. Support for MSMEs: Recognizing the importance of micro, small, and medium enterprises (MSMEs) in driving economic growth, the budget includes measures to enhance credit access and provide financial support through various schemes.
  4. Infrastructure Investments: A capital expenditure target of ₹11.21 lakh crore is set for infrastructure projects, including roads, railways, and urban development initiatives aimed at improving connectivity and boosting economic activity.
  5. Social Welfare Programs: The budget emphasizes social security measures for gig workers and aims to enhance benefits for women and marginalized communities through targeted schemes that promote employment and financial independence.
  6. Focus on Employment Generation: The Economic Survey highlighted a decrease in unemployment rates from 6% in 2017-18 to 3.2% in 2023-24. The budget aims to sustain this trend by promoting job creation in sectors such as digital technology and renewable energy.

Economic Context

The budget comes at a critical juncture as India faces global economic uncertainties and challenges such as rising inflation and geopolitical tensions. The projected GDP growth rate for FY26 is estimated between 6.3% and 6.8%, reflecting a need for strategic investments to maintain momentum.

Conclusion

The Union Budget 2025-26 represents a comprehensive approach to fostering economic growth while addressing social inequalities through targeted initiatives across various sectors. With a focus on agriculture, MSMEs, education, urban development, and social welfare. This budget aims not only to stimulate economic activity but also to enhance the quality of life for all citizens.

As India strives towards its goal of becoming a developed nation by 2047 under the Viksit Bharat initiative, effective implementation of these measures will be crucial in realizing this ambitious vision while navigating global economic challenges ahead. The budget sets a clear pathway forward, emphasizing inclusivity and resilience as cornerstones of India’s growth strategy in the coming years.

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