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Union Budget 2025 - Comprehensive Analysis Report

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, emphasizes economic growth, fiscal discipline, and sectoral reforms with significant allocations for infrastructure, healthcare, and digital initiatives. Key highlights include increased tax-free income limits, a fiscal deficit target of 4.4% of GDP, and substantial investments in renewable energy and agriculture. The budget aims to create 20 million jobs over five years while addressing challenges such as implementation risks and global economic uncertainties.

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84 views

Union Budget 2025 - Comprehensive Analysis Report

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, emphasizes economic growth, fiscal discipline, and sectoral reforms with significant allocations for infrastructure, healthcare, and digital initiatives. Key highlights include increased tax-free income limits, a fiscal deficit target of 4.4% of GDP, and substantial investments in renewable energy and agriculture. The budget aims to create 20 million jobs over five years while addressing challenges such as implementation risks and global economic uncertainties.

Uploaded by

keshav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Union Budget 2025 - Comprehensive

Analysis Report
1. Introduction

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025,
focuses on economic growth, fiscal discipline, and sectoral reforms. The budget aims to enhance
infrastructure, boost investments, simplify taxation, and support digital and green energy
transitions. This report provides a detailed analysis of key provisions, sectoral impact, and future
implications based on o'icial budget documents and the finance minister's speech.

2. Key Highlights

2.1 Taxation & Fiscal Policies

Increased tax-free income limit to ₹5 lakh.

Revised tax slabs for middle-income earners.

Fiscal deficit target set at 4.4% of GDP, down from 5.2% in FY24.

Reduced customs duty on essential imports to support domestic manufacturing.

Total tax revenue collection target: ₹30.43 lakh crore.

Corporate tax rate remains unchanged at 22% for domestic companies.

Simplified GST compliance framework for MSMEs, reducing filing burdens.

2.2 Economic Growth & Investments

₹11.1 lakh crore allocated for capital expenditure, 3.3% of GDP.


100% FDI permitted in the insurance sector.
₹10,000 crore Alternative Investment Fund for startups.
MSME credit guarantee scheme worth ₹50,000 crore.
Disinvestment target: ₹1.05 lakh crore for FY25.

2.3 Infrastructure & Transportation

Railways: ₹2.55 lakh crore allocated for high-speed trains and modernization projects.
Highways: ₹2.77 lakh crore for expressway expansion and connectivity projects.
₹50,000 crore allocated for urban development & smart cities.
₹1.2 lakh crore allocated for housing projects under PM Awas Yojana.

2.4 Agriculture & Rural Development

Higher Minimum Support Price (MSP) for key crops with ₹2.5 lakh crore allocated.
Introduction of AI and drone technology in agriculture.
₹1.3 lakh crore for rural employment programs like MGNREGA.
Subsidy of ₹85,000 crore for fertilizers and agro support.
₹75,000 crore allocated for irrigation projects and rural infrastructure.

2.5 Digital & Green Economy


₹20,000 crore investment in renewable energy projects.
Expansion of UPI and digital banking infrastructure.
Additional incentives for electric vehicles (EVs) and charging stations worth ₹5,000
crore.
₹8,000 crore dedicated to semiconductor manufacturing incentives.
₹12,000 crore allocated for AI-driven initiatives in public services.

2.6 Healthcare & Education

New AIIMS hospitals: ₹1 lakh crore allocated for healthcare infrastructure.


₹1.2 lakh crore allocated for digital education and skill development.
₹1.5 lakh crore for the expansion of medical colleges and health institutions.
Free vaccination program for underprivileged children, allocated ₹10,000 crore.

3. Special Provisions

Women’s Empowerment Fund: ₹15,000 crore for women entrepreneurs.


Interest-Free Loans for Small Farmers under a ₹50,000 crore scheme.
Cybersecurity Strengthening Measures: ₹10,000 crore for digital security
infrastructure.
Startup India Expansion: ₹5,000 crore for early-stage funding.

4. How the Government Will Fund the Budget

The government will raise funds for the Union Budget 2025 through multiple channels:

Tax Revenue:

o Direct tax collections targeted at ₹18.3 lakh crore.

o Indirect tax (GST, excise, and customs) expected to generate ₹12.1 lakh crore.

Disinvestment: ₹1.05 lakh crore expected from stake sales in public sector enterprises.
Borrowings:

o Gross market borrowing: ₹14.1 lakh crore.

o Net borrowing after repayments: ₹10.2 lakh crore.

o External loans from multilateral institutions such as World Bank and ADB (₹1.5
lakh crore).

Non-Tax Revenue:

o Dividends from RBI and public sector units (₹2.5 lakh crore).

o Spectrum auction revenue (₹1.2 lakh crore).

5. Funds Allocated to Neighbouring Countries

India has allocated ₹17,500 crore in financial aid and grants to neighbouring countries for
strategic cooperation and economic development:

Bhutan: ₹5,500 crore for hydropower projects and infrastructure development.


Nepal: ₹3,000 crore for cross-border energy cooperation and trade facilitation.
Bangladesh: ₹2,500 crore for connectivity projects, railways, and economic corridors.
Sri Lanka: ₹2,000 crore for economic relief and trade partnerships.
Maldives: ₹1,500 crore for tourism infrastructure and maritime security.
Myanmar: ₹1,000 crore for border area development and trade linkages.
Afghanistan: ₹1,000 crore for humanitarian aid and reconstruction projects.

6. Finance Minister's Speech - Key Excerpts

Finance Minister Nirmala Sitharaman, in her budget speech, highlighted:

1. Economic Growth Focus:

o "India's GDP is expected to grow at 7.2% in FY25, making it one of the fastest-
growing major economies."

2. Employment Generation:

o "With increased investments in infrastructure, digital economy, and


manufacturing, we aim to create **20 million new jobs over the next five years."

3. Ease of Doing Business:

o "Tax reforms and reduced compliance burdens will make India an even more
attractive destination for investors."

4. Social Welfare Commitments:

o "We remain committed to ensuring that **every Indian has access to quality
healthcare, education, and digital financial services."

7. Sector-Wise Impact

Sector Allocation (₹ Crore) Impact

Automobile ₹5,000 Boost for EV production & charging infrastructure

Banking & Finance ₹50,000 Strengthened MSME credit schemes

Real Estate ₹2,30,000 Increased housing & urban development funds

Healthcare ₹1,00,000 Expansion of AIIMS & healthcare accessibility

Agriculture ₹2,50,000 MSP hike & aggrotech incentives

Manufacturing ₹30,000 Lower import duties on key raw materials

Defense ₹6,50,000 Strengthening indigenous manufacturing and


R&D

Education ₹1,20,000 Digital learning & skill development

Renewable Energy ₹20,000 Green hydrogen, solar & wind energy expansion

8. Challenges & Concerns

Implementation Risks: Timely execution of large infrastructure projects.


Revenue Shortfalls: Potential dip in collections due to lower income tax rates.
Global Economic Uncertainty: Inflation risks and potential impact on fiscal targets.
Rural Distress: Balancing farmer subsidies while maintaining fiscal discipline.
Job Market Stability: Ensuring job creation aligns with economic growth expectations.

9. Conclusion

The Union Budget 2025 focuses on economic growth, social welfare, and infrastructure
expansion while maintaining fiscal discipline. The significant increase in capital expenditure,
focus on digital transformation, and incentives for green energy position India for long-term
sustainable development. However, successful implementation and e'icient allocation of funds
will be key to achieving the outlined objectives.

Prepared By: Keshav Shukla


Date: February 2025

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