Now Loading

FM Nirmala Sitharaman Presents Union Budget 2025-26: Aims for Inclusive Growth and Empowerment

In her address for the Union Budget 2025-26, Finance Minister Nirmala Sitharaman began with a quote from renowned Telugu poet and playwright, Shri Gurajada Appa Rao, who said, “A country is not just its soil; a country is its people.” This powerful statement set the tone for a budget focused on the theme “Sabka Vikas” – fostering balanced growth across all regions of India. This theme is deeply aligned with the government’s vision for a “Viksit Bharat” (Developed India), which aims to uplift the nation through holistic, inclusive growth, with a focus on key principles such as:

  • Zero poverty,
  • 100% access to quality education,
  • Affordable and high-quality healthcare,
  • Full employment with skilled labor,
  • Empowering women by having 70% of them actively engaged in economic activities,
  • Strengthening agriculture to position India as the ‘food basket of the world.’

The Finance Minister emphasized that the Union Budget 2025-26 would continue the government’s efforts to accelerate growth, promote inclusive development, stimulate private sector investment, and uplift household sentiments, thereby increasing the spending power of India’s growing middle class. She detailed how the budget would focus on critical sectors such as agriculture, MSMEs, investment, and exports, with specific reforms targeted at each area.

Agriculture: The First Engine of Growth

The agriculture sector received significant attention in this year’s budget. The government introduced the “Prime Minister Dhan-Dhaanya Krishi Yojana,” a collaborative initiative with states aimed at improving productivity, diversifying crops, and enhancing post-harvest storage and irrigation facilities across 100 districts. The scheme will also provide long-term credit to farmers.

In a major move to strengthen India’s pulse production, a six-year “Mission for Aatmanirbharta in Pulses” will focus on boosting the production of Tur, Urad, and Masoor, with central agencies like NAFED and NCCF set to procure these pulses from farmers over the next four years. The Budget also outlined a comprehensive program for vegetables, fruits, and high-yielding seeds, as well as a five-year Mission for Cotton Productivity.

Additionally, the government increased the loan limits for Kisan Credit Cards from ₹3 lakh to ₹5 lakh under a modified interest subvention scheme. A multi-sectoral “Rural Prosperity and Resilience” program will also be launched to address underemployment in agriculture, especially for rural women, young farmers, and marginalized groups.

MSMEs: The Second Engine of Growth

Micro, Small, and Medium Enterprises (MSMEs), which contribute to 45% of India’s exports, are another critical growth engine. To help MSMEs scale up and improve efficiency, the Budget enhanced investment and turnover limits for classification, doubling the thresholds for both. This will facilitate technological upgrades and improve access to capital.

In a bid to empower women and marginalized communities, a new scheme will provide term loans of up to ₹2 crore for 5 lakh first-time entrepreneurs from Scheduled Castes, Scheduled Tribes, and women in the next five years. The government also announced plans to make India a global hub for toy manufacturing under the “Made in India” brand and launched a National Manufacturing Mission to further the “Make in India” initiative.

Investment: The Third Engine of Growth

Investment was defined as the third engine of growth. The budget emphasizes three key areas: investment in people, the economy, and innovation. For people, the government plans to set up 50,000 Atal Tinkering Labs in government schools over the next five years. Connectivity in rural areas will be boosted by providing broadband to secondary schools and primary health centers under the Bharatnet project.

To support innovation, the government has earmarked ₹20,000 crore for private sector-driven Research, Development, and Innovation initiatives. Additionally, five National Centres of Excellence for skilling will be established, and a Centre of Excellence in Artificial Intelligence for education will be set up with an allocation of ₹500 crore.

Infrastructure development also received significant attention with a proposal for a 3-year pipeline of projects in Public-Private Partnership (PPP) mode. An interest-free loan of ₹1.5 lakh crore for capital expenditure and incentives for reforms was announced to boost states’ infrastructure projects. The Jal Jeevan Mission was extended until 2028, focusing on the quality and sustainability of rural water supply schemes.

Exports: The Fourth Engine of Growth

Exports were identified as the fourth engine driving growth. To help MSMEs tap into global markets, an “Export Promotion Mission” will be launched, facilitated by the Ministries of Commerce, MSME, and Finance. The government also proposed the creation of the “BharatTradeNet” digital infrastructure for simplifying international trade documentation and financing.

The budget also included support for domestic manufacturing, particularly in electronics, to leverage the opportunities presented by Industry 4.0. The government plans to promote Global Capability Centres in emerging Tier 2 cities, further integrating India into global supply chains.

Reforms as the Fuel to the Engine

The Finance Minister underscored that reforms are the “fuel” that will drive these engines of growth. Over the past decade, the government has implemented various tax reforms such as faceless assessments, the introduction of the tax payer’s charter, faster returns processing, and the Vivad Se Vishwas scheme for tax dispute resolution. The Budget reaffirms the government’s commitment to a tax system based on the principle of “trust first, scrutinize later,” with efforts aimed at reducing the compliance burden and encouraging voluntary tax compliance.

Budget Estimates and Direct Tax Reforms

For FY 2025-26, the Union Budget estimates total receipts (excluding borrowings) at ₹34.96 lakh crore, while total expenditure is projected at ₹50.65 lakh crore. The government also introduced new income tax slabs to benefit the middle class, raising the tax-free limit to ₹12 lakh annually (₹1 lakh per month). This will apply to all income except special rates like capital gains, effectively providing tax relief for salaried individuals earning up to ₹12.75 lakh annually.

The Budget proposes a revised tax rate structure under the new tax regime:

  • ₹0 – ₹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%

Additionally, the Budget has rationalized tax deductions, including doubling the TDS limit for interest earned by senior citizens to ₹1 lakh and increasing the TDS threshold for rent to ₹6 lakh.

Customs Reforms and Support for Domestic Manufacturing

The Budget also proposes customs reforms to promote “Make in India” by removing tariffs on certain goods, rationalizing duty structures, and exempting critical minerals like lithium-ion battery components from Basic Customs Duty (BCD). In line with this, the government has announced measures to promote the manufacture of lithium-ion batteries and other essential components for electronics and electric vehicles.

In her speech, Finance Minister Sitharaman reiterated that the success of “Viksit Bharat” is built on the pillars of democracy, demography, and demand. She expressed confidence that the middle class, which drives India’s consumption, savings, and investment, will benefit significantly from the proposed tax reforms, further boosting the economy. The Budget 2025-26 is a comprehensive roadmap, designed to propel India toward becoming a developed nation, with an emphasis on inclusivity, growth, and sustainability across all sectors of the economy.

Tags: Budget 2025

Upcoming Conferences