The Union Budget for the fiscal year 2025-26 was presented by Finance Minister Nirmala Sitharaman on February 1, 2025. This budget focuses on inclusive growth, economic resilience, and strategic reforms aimed at boosting various sectors of the economy.
Key Themes and Goals
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- Sabka Vikas: The overarching theme of the budget emphasizes balanced growth across all regions of India.
- Viksit Bharat: This initiative aims for a developed India with goals such as zero poverty, quality education, affordable healthcare, and high participation of women in the workforce.
Fiscal Strategy
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- The fiscal deficit for the revised estimate of 2024-25 stands at 4.8% of GDP, with a target of 4.4% for 2025-26.
- Total government receipts (excluding borrowings) are projected at INR 34.96 trillion, while total expenditure is estimated at INR 50.65 trillion.
| Fiscal Indicator | FY 2024-25 Revised Estimate (RE) | FY 2025-26 Budget Estimate (BE) |
|---|---|---|
| Fiscal Deficit | 4.8% | 4.4% |
| Total Receipts | INR 31.47 trillion | INR 34.96 trillion |
| Total Expenditure | INR 47.16 trillion | INR 50.65 trillion |
| Capital Expenditure | INR 10.18 trillion | INR 11.2 trillion |
Major Reforms
Taxation and Financial Reforms
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- Income Tax Changes: Individuals earning up to INR 12 lakh annually will not be liable for income tax under the new regime, with a further extension to INR 12.75 lakh for salaried taxpayers after deductions.
- Tax Deducted at Source (TDS): The threshold for TDS on rent has been raised from INR 2.4 lakh to INR 6 lakh, simplifying tax compliance.
- Customs Duty Exemptions: Full exemptions on basic customs duty for certain life-saving drugs and components for electric vehicles and textiles to encourage domestic production.
Support for Key Sectors
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- Agriculture Initiatives:
- Launch of the Prime Minister Dhan-Dhaanya Krishi Yojana targeting low productivity districts.
- Enhanced Kisan Credit Card limits increased from INR 3 lakh to INR 5 lakh.
- Comprehensive programs aimed at improving crop diversity, irrigation, and post-harvest storage.
- Support for MSMEs: Targeted reforms to empower micro, small, and medium enterprises through financial support and regulatory easing.
- Agriculture Initiatives:
Engines of Growth
The budget identifies four primary engines driving development:
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- Agriculture
- Micro, Small and Medium Enterprises (MSMEs)
- Investment
- Exports
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These sectors are expected to be supported through comprehensive reforms aimed at enhancing productivity and competitiveness.
Conclusion
The Union Budget 2025-26 reflects the government’s commitment to fostering an inclusive economy while addressing critical sectors like agriculture and MSMEs. With a focus on tax reforms, fiscal discipline, and strategic investments, this budget aims to position India as a resilient global economic player while ensuring that growth benefits all segments of society.
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