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Budget

The Union Budget for 2025-26, presented by Finance Minister Nirmala Sitharaman, focuses on personal income tax reforms, agricultural initiatives, and support for MSMEs to stimulate economic growth. Key highlights include raising the income tax exemption threshold, enhancing credit for farmers, and allocating ₹11.21 trillion for capital expenditure on infrastructure. The budget aims to balance economic growth with social welfare through various initiatives, including support for gig workers and expanded medical education.

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Arbiya Khan
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19 views

Budget

The Union Budget for 2025-26, presented by Finance Minister Nirmala Sitharaman, focuses on personal income tax reforms, agricultural initiatives, and support for MSMEs to stimulate economic growth. Key highlights include raising the income tax exemption threshold, enhancing credit for farmers, and allocating ₹11.21 trillion for capital expenditure on infrastructure. The budget aims to balance economic growth with social welfare through various initiatives, including support for gig workers and expanded medical education.

Uploaded by

Arbiya Khan
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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The Union Budget for 2025-26, presented by Finance Minister Nirmala Sitharaman on

February 1, 2025, outlines several key initiatives aimed at stimulating economic growth,
enhancing infrastructure, and providing relief to various sectors of society. Below are the
analytical highlights of the budget:

1. Personal Income Tax Reforms

●​ Revised Tax Slabs: The budget introduces significant changes to the personal
income tax structure under the new tax regime. Income up to ₹1.2 million (₹12 lakh)
is now exempt from tax, up from the previous threshold of ₹0.7 million (₹7 lakh).​

●​ This restructuring aims to increase disposable income for the middle class, thereby
boosting consumption and savings.​

2. Agricultural Initiatives

●​ Prime Minister Dhan-Dhaanya Krishi Yojana: A new scheme targeting 100 districts
to enhance productivity, promote crop diversification, and improve post-harvest
infrastructure.​

●​ Mission for Self-Reliance in Pulses: A six-year program focusing on achieving


self-sufficiency in pulses like Tur, Urad, and Masoor, with procurement support from
central agencies.​

●​ Enhanced Credit for Farmers: The loan limit under the Kisan Credit Card has been
increased from ₹300,000 to ₹500,000, facilitating greater access to credit for farmers,
fishermen, and dairy farmers.​

3. Support for Micro, Small, and Medium Enterprises (MSMEs)

●​ Revised Classification Criteria: Investment and turnover limits for MSMEs have
been increased to provide greater access to capital and technology.​

●​ Inclusive Growth Scheme: A new initiative offering term loans of up to ₹20 million to
500,000 first-time entrepreneurs from Scheduled Castes, Scheduled Tribes, and
women over the next five years.​

4. Infrastructure and Investment

●​ Capital Expenditure: The government has allocated ₹11.21 trillion for capital
expenditure in 2025-26, a modest increase from the previous year, focusing on
infrastructure development.​

●​ Public-Private Partnerships (PPP): Ministries will roll out a three-year pipeline of


PPP projects, and states can access support for proposal development through the
Infrastructure Investment Promotion Fund.​

5. Tax and Regulatory Reforms

●​ New Income Tax Bill: The government plans to introduce a new Income Tax Bill
aimed at simplifying the tax code, reducing compliance burdens, and enhancing
clarity for taxpayers.​

●​ Customs Duty Rationalization: The budget proposes reducing customs duty on


certain items while introducing the Agriculture Infrastructure and Development Cess
(AIDC), resulting in a shift from customs duty to cess.​

6. Social Welfare and Employment

●​ Support for Gig Workers: Gig workers will be provided access to healthcare under
the Ayushman Bharat scheme, along with registration on the e-Shram portal to
ensure inclusion in welfare initiatives.​

●​ PM SVANidhi Scheme Revamp: The scheme for street vendors will be revamped to
provide UPI-linked credit cards with a ₹30,000 limit, enhanced bank loans, and
capacity-building support.​

7. Education and Research

●​ Medical Education Expansion: An additional 10,000 seats will be added in medical


colleges and hospitals in the next year, with a goal of adding 75,000 seats over the
next five years.​

●​ Research Fellowships: The PM Research Fellowship scheme will provide 10,000


fellowships for technological research in IITs and IISc.​

8. Fiscal Management

●​ Deficit Targets: The fiscal deficit for 2025-26 is targeted at 4.4% of GDP, down from
the revised estimate of 4.8% in 2024-25. The revenue deficit is projected to decrease
to 1.5% of GDP from 1.9%.

Overall, the Union Budget 2025-26 emphasizes tax relief for the middle class, support for
agriculture and MSMEs, infrastructure development, and social welfare, aiming to foster
inclusive and sustainable economic growth.

QUESTIONS

1.​ Are you in favour of government’s relaxation of taxes for the middle class?
2.​ How will the new tax reforms and fiscal deficit targets impact India's economic
growth, inflation, and investor confidence in the short and long term?

3.​ Do you think the 2025-26 Budget effectively balances economic growth with social
welfare, or does it favor one over the other? Why?

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