Finance Minister Nirmala Sitharaman is presenting her eighth consecutive Union Budget on Saturday. This will bring her closer to the record of ten budgets presented by former Prime Minister Morarji Desai.
The budget is anticipated to balance measures for bolstering slowing economic growth with fiscal prudence, focusing on boosting consumption while continuing the path towards a reduced fiscal deficit.
The Economic Survey 2024-25, released Friday, projects India’s economic growth to be between 6.3% and 6.8% in 2025-26, up from an estimated 6.4% this year.
Nirmala Sitharaman presents Budget before Parliament
Finance Minister Nirmala Sitharaman is presenting her eighth consecutive Union Budget, the first full-year budget for the Narendra Modi government’s third term. Amidst geopolitical uncertainty and a four-year low in economic growth, the middle class is anticipating relief in the form of income tax rates or slab adjustments.
Sitharaman says geopolitical headwinds will lower global economic growth
Citing ongoing geopolitical challenges, Sitharaman attributed slower global economic growth to the medium term. She added, however, that the vision of a “Viksit Bharat” (developed India) and past achievements provide the impetus to continue with resolute progress.
Indian economy is fastest growing among all developing economies, said FM Sitharaman. Together we embark on journey to unlock our potential for greater prosperity, she said.
FM Sitharaman says the next 5 years as a unique opportunity to realise Sabka Vikas
Sitharaman highlighted that the Indian economy is the fastest-growing among all major economies, attributing this success to its development achievements and structural reforms, which have garnered global recognition. She emphasised that the next five years present a unique opportunity to achieve “Sabka Vikas” – fostering balanced growth across all regions.
Budget a testament to middle class of the country: Sitharaman
While presenting the Budget, Sitharaman stated that the Budget stands as a testament to the country’s middle class. Amid increasing financial pressures, the middle class has been anticipating a tax reduction in this Budget.
What does Viksit Bharat encompass: Nirmala Sitharman
Finance Minister Nirmala Sitharaman stated that the Union Budget is focused on accelerating growth and fostering inclusive development. “Together, we embark on a journey to unlock our potential for greater prosperity,” she said, emphasising that the Indian economy remains the fastest-growing among all developing economies.
Taxation, mining among 6 sectors where Budget will initiate reforms: Sitharaman
FM Sitharaman stated that the Budget will introduce reforms across six key areas: taxation, urban development, mining, the financial sector, power, and regulatory frameworks.
Opposition walks out of Lok Sabha
Opposition parties staged a walkout from the Lok Sabha to protest after their request to discuss the Mahakumbh stampede was denied.
Centre launches scheme aiming to benefit 1.7 crore farmers
Sitharaman announced the Prime Minister Dhanya Dhan Krishi Yojana, an initiative aimed at developing agricultural districts. Inspired by the success of the aspirational district’s program, the government will launch Dhan Dhanya Krishi to further enhance agricultural growth and productivity.
Proposals for Agriculture:
- PM Dhan Dhanya Krishi Yojana: A program to develop agricultural districts, covering 100 districts across the country.
- National Mission for High-Yielding Seeds: A new initiative to boost crop productivity through improved seed varieties.
- Comprehensive Program for Vegetables and Fruits: A collaborative effort with states to enhance the production and quality of fruits and vegetables.
- Makhana Board in Bihar: A dedicated board will be established to promote the cultivation and marketing of makhana (foxnuts).
- Fisheries Development: With India ranking as the second-largest producer of fishery products globally, the government will introduce a framework for the sustainable utilization of fisheries within India’s economic zone.
- Mission for Cotton Productivity: A mission aimed at significantly improving cotton farming practices and yields.
- Kisan Credit Cards: The loan limit under the Kisan Credit Card scheme will be increased from ₹3 lakh to ₹5 lakh, benefiting 7.7 crore farmers, fishermen, and dairy farmers.
- Atmanirbharta in Urea Production: A new urea plant with an annual capacity of 12.7 lakh metric tonnes will be set up in Assam to reduce dependency on imports.
- India Post Transformation: With 1.5 lakh rural post offices and the India Post Payment Bank, India Post will be repositioned to drive the rural economy. Additionally, it will be transformed into a large public-sector logistics organization to meet growing demands.
These initiatives aim to strengthen India’s agricultural sector, promote self-reliance, and boost rural economic growth.
Sitharaman says MSMEs as the Second Engine
Sitharaman emphasised that MSMEs (Micro, Small, and Medium Enterprises) serve as the second engine of growth, encompassing both manufacturing and services sectors, with a focus on the 5.7 crore MSMEs operating across the country.
“Currently, over 1 crore registered MSMEs, contributing 36% of our manufacturing output, are working together to position India as a global manufacturing hub,” she stated. “These MSMEs account for 45% of our exports. To help them achieve greater economies of scale, technological upgradation, and better access to capital, the investment and turnover limits for MSME classification will be increased to 2.5 times and 2 times, respectively.”
To further improve credit access, the credit guarantee cover will be expanded, including support for startups.
Fund of Funds for Startups: Alternative investment funds have already secured commitments exceeding ₹91,000 crore. A new Fund of Funds with an expanded scope and an additional contribution of ₹10,000 crore will be established. Additionally, a new scheme will be launched to support 5 lakh women from Scheduled Caste and Scheduled Tribe communities who are first-time entrepreneurs.
These measures aim to strengthen the MSME sector, foster innovation, and empower entrepreneurs, particularly women and marginalized communities.
Measures for Labour-Intensive Sectors
During her budget speech, Sitharaman announced that the government will introduce specific policy and facilitation measures to promote employment in labour-intensive sectors.
Footwear and Leather Sector: A Focus Product scheme will be implemented, aiming to create 22 lakh jobs in this sector.
Toy Sector: A scheme will be launched to position India as a global hub for toy manufacturing.
Food Processing Sector: A National Institute of Food Technology, Entrepreneurship, and Management will be established in Bihar. “This initiative will boost farmers’ income through value addition, while also providing skilling, entrepreneurship, and employment opportunities for the youth,” she added.
These measures aim to drive growth, create jobs, and enhance income opportunities across key labour-intensive industries.
Sitharaman says 50K Atal Tinkering labs will be set up in govt schools in next five years
- Atal Tinkering Labs: Over the next five years, 50,000 Atal Tinkering Labs will be established in government schools to foster innovation and creativity among students.
- Broadband Connectivity: All government secondary schools and primary centers in rural areas will be provided with broadband connectivity to enhance digital access and learning.
- Bharatiya Bhasha Pustak Scheme: A new initiative will be launched to promote Indian language books for school and higher education curricula.
- National Centres of Excellence for Skilling: Five new centers will be established with global expertise and partnerships, building on commitments made in the July 2024 budget.
- Expansion of IITs: The capacity of IITs will be further expanded. Over the past decade, the total number of students across 23 IITs has doubled from 65,000 to 1.35 lakh. Additional infrastructure will be developed in the five IITs established after 2014, and IIT Patna will also undergo expansion.
These measures aim to strengthen education, skill development, and innovation across the country.
Government unveils measures to boost urban livelihoods and support gig workers
In a bid to strengthen urban livelihoods and support vulnerable groups, the government has announced a new scheme aimed at the socio-economic development of urban workers. Finance Minister Nirmala Sitharaman outlined key initiatives during her budget speech, focusing on street vendors and gig workers, who play a crucial role in the urban economy.
- Revamp of PM SVANidhi Scheme: The PM SVANidhi scheme, which has already benefited over 68 lakh street vendors, will be revamped to provide enhanced loan facilities, UPI-linked credit cards, and capacity-building support. This move aims to further empower street vendors and improve their access to financial resources.
- ID Cards and Health Cover for Gig Workers: Recognizing the growing contribution of gig workers to the new-age services economy, the government will introduce ID cards for online platform workers, register them on the E-shram portal, and provide health cover. This initiative is expected to benefit 1 crore gig workers, offering them greater social security and recognition.
These measures underscore the government’s commitment to addressing the needs of urban workers, ensuring financial inclusion, and providing essential support to those driving the informal and gig economies.
Jal Jeevan Mission achievements and future goals
Finance Minister Nirmala Sitharaman highlighted the significant progress of the Jal Jeevan Mission, stating that since its launch in 2019, the initiative has provided potable tap water connections to 15 crore households.
To further accelerate the mission’s impact, she announced enhanced outlays with the aim of achieving 100% coverage in rural India by 2028, up from the current 80%. This renewed focus underscores the government’s commitment to ensuring safe and accessible drinking water for all rural households.
Budget 2025: Nuclear Energy Mission unveiled
Finance Minister Nirmala Sitharaman emphasised the critical role of nuclear energy in India’s energy transition, stating that the development of at least 100 GW of nuclear energy by 2047 is essential.
To encourage private sector participation in this sector, the government will propose amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act.
Additionally, a Nuclear Energy Mission will be established with an outlay of ₹20,000 crores to focus on the research and development of small modular reactors (SMRs). The government aims to operationalize at least five indigenously developed small modular reactors by 2033, marking a significant step toward sustainable and clean energy solutions.
Revamped UDAAN Scheme and Infrastructure boost announced by Sitharaman
Finance Minister Nirmala Sitharaman highlighted the success of the UDAAN regional connectivity scheme, which has enabled 1.5 crore middle-class citizens to fulfil their aspirations for faster travel.
A modified version of the UDAAN scheme will be launched to further enhance regional connectivity, targeting 120 new destinations and aiming to serve 4 crore passengers over the next decade. The revamped scheme will also support the development of helipads and smaller airports in hilly and aspirational districts.
Union Finance Minister Nirmala Sitharaman stated, “Hostel and other infrastructure capacity at IIT Patna will also be expanded. Centre of Excellence in AI for Education – I had announced three centres for excellence in artificial intelligence for agriculture, health, and sustainable cities in 2023. Now, a Centre of Excellence in artificial intelligence for education will be set up with a total outlay of ₹500 crore. Expansion of medical education – Our government has added almost 1.1 lakh undergraduate and postgraduate medical education seats in 10 years. In the next year, 10,000 additional seats will be added in medical colleges and hospitals, working towards the goal of adding 75,000 seats in the next five years. Daycare cancer centres will be established in all district hospitals.”
Sitharaman says no income tax till income up to Rs 12 lakh
In a significant Budget announcement, Union Finance Minister Nirmala Sitharaman declared that individuals with an income of up to ₹12 lakh will not be subject to income tax.
Cancer, chronic diseases – 36 life-saving drugs exempted from basic customs duty
In a move to provide relief to patients suffering from cancer and rare diseases, 36 life-saving drugs will be added to the list of items fully exempt from customs duty. Additionally, six life-saving medicines will be included in the list of items eligible for concessional customs duty.
Furthermore, specified drugs and medicines under patient assistance programmes run by pharmaceutical companies are already fully exempt from Basic Customs Duty (BCD). To expand this benefit, 37 more drugs and 13 additional patient management programmes will be added to this exemption list. These measures aim to make critical treatments more accessible and affordable for patients in need.
In a significant Budget announcement, Union Finance Minister Nirmala Sitharaman stated that the annual threshold for Tax Deducted at Source (TDS) on rent has been increased from ₹2.40 lakh to ₹6 lakh. This change is expected to benefit small taxpayers who receive smaller rental payments.
