Introducing the Union Budget 2025, Union Finance Minister Nirmala Sitharaman unveiled the first comprehensive budget under the Modi 3.0 administration. We embark on a journey to unclock our country’s immense potential. Our economy is the fastest growing among all the major economies. Confidence in India’s potential has only grown, says Nirmala Sitharaman.
The budget’s core focus is on empowering four key groups ‘GYAN’— the underprivileged, youth, farmers, and women—while driving reforms across six crucial sectors: taxation, urban development, mining, financial services, power, and regulatory policies.
Finance Minister outlined the key focus areas of Budget 2025, emphasizing a multi-pronged approach to economic growth and social development. The budget aims to accelerate overall economic expansion while ensuring inclusive development, particularly for marginalized communities. A strong push has been given to invigorate private sector investment, recognizing its crucial role in driving industrial progress and job creation. Additionally, measures have been introduced to uplift household spending and boost consumer demand. Strengthening the financial capacity of India’s expanding middle class remains a priority, with tax reliefs and policy initiatives designed to enhance their spending power and overall economic well-being.
#Agriculture: Finance Minister Nirmala Sitharaman has announced the PM Dhan Dhanya Krishi Yojana, a new initiative aimed at enhancing agricultural productivity across 100 districts. The scheme will focus on key areas such as crop diversification, improved irrigation, augmented storage facilities, and better access to both long and short-term credit for farmers. By leveraging the convergence of existing schemes, the initiative seeks to drive significant advancements in the agricultural sector. Additionally, the Finance Minister has launched a five-year mission to promote cotton production, reinforcing the government’s commitment to supporting farmers.
As part of efforts to boost agricultural and allied activities, a dedicated Makhana Board will be established in Bihar. Recognizing the importance of fisheries, the government will also prioritize sustainable harnessing of fisheries, particularly in the Andaman and Nicobar Islands and Lakshadweep. These measures aim to strengthen India’s agricultural economy while ensuring sustainable resource management.
#KisanCreditCard: In a significant relief for farmers, the loan limit under the Kisan Credit Card (KCC) scheme has been increased from ₹3 lakh to ₹5 lakh. The KCC, which provides short-term credit facilities to 77 million farmers, fishermen, and dairy farmers, will now offer enhanced financial support under the modified interest subvention scheme. This move is expected to ease liquidity constraints and empower the rural economy.
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#MSMEs: The Finance Minister highlighted the pivotal role of Micro, Small, and Medium Enterprises (MSMEs), which account for 45% of India’s total exports and employ 7.5 crore workers. Acknowledging their contribution to making India a manufacturing hub, the government is committed to ensuring better access to capital for MSMEs. To facilitate this, FM Sitharaman announced the introduction of customized credit cards for MSMEs, a new fund of funds (FoF) for startups, and an expanded scope for an existing FoF.
#CentresofExcellence: The Centre has announced plans to develop five National Centres of Excellence for skilling in collaboration with global partners. These institutions will focus on enhancing skill development and training to meet international standards.
#IITPatna: Additionally, the government has initiated infrastructure expansion for five Indian Institutes of Technology (IITs) that were developed after 2014, creating facilities to accommodate 6,500 more students. IIT Patna will also undergo expansion. Furthermore, broadband connectivity will be provided to all secondary schools and Primary Health Centres (PHCs) to enhance digital access.
The government will establish a National Institute of Food Technology, Entrepreneurship, and Skilling in Bihar. This initiative aims to boost education and innovation in food technology while fostering entrepreneurial ventures in the sector.
#Manufacturing: Finance Minister announced the Centre’s commitment to making India a global hub for toy manufacturing. The government will focus on developing dedicated clusters, enhancing skills, and strengthening the manufacturing ecosystem to support this vision.
#Startups: A new Fund of Funds for Startups will be established to boost entrepreneurship, announced Finance Minister. The government will make a fresh contribution of ₹10,000 crore, adding to the existing ₹10,000 crore already allocated for the initiative.
#Employment: The footwear and leather sector will employ 2.2 million people under a focus product scheme, generating over ₹4 trillion and exporting ₹1.1 trillion.
The Jal Jeevan Mission has been extended to 2028 with an increased budget allocation, as announced. Additionally, the government will establish a ₹1 trillion Government Challenge Fund to develop cities as growth hubs.
#Healthcare: The government will set up daycare cancer centres in all district hospitals within the next three years. Also, 36 life-saving medicines will be fully exempt from customs duty, and 37 additional medicines, along with 13 new patient assistance programmes, will also be exempted from Basic Customs Duty.
#Energy: Finance Minister emphasized the importance of developing 100 gigawatts of nuclear energy by 2047. To support energy transmission efforts, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be introduced to encourage active private sector partnerships.
#Infra: Outlay of Rs 1.5 trillion towards 50-year interest free loans to states to augment infrastructure.
#Insurance: The Foreign Direct Investment (FDI) limit in the insurance sector will be raised from 74% to 100% for firms that invest the entire premium in India.
#Tax: Under the revised tax framework, income up to ₹12 lakh will now be exempt from taxation, while salaried individuals will enjoy a slightly higher exemption limit of ₹12.75 lakh, incorporating the standard deduction.
To simplify tax compliance, the Finance Minister also announced a streamlined Tax Deduction at Source (TDS) framework. Presenting the Budget for 2025-26, she emphasized that the tax proposals aim to benefit the middle class by reforming income tax regulations, rationalizing TDS, and reducing the compliance burden. Additionally, the government plans to introduce a fresh Income Tax (I-T) Bill in Parliament next week.
