The Budget 2025-26 continues the government's focus on accelerating growth, ensuring inclusive development, and strengthening private sector investments while also uplifting the middle class. With geopolitical uncertainties affecting global economic growth, India is positioning itself as a leading global economy with a vision of ‘Viksit Bharat’ by 2047.

Budget Theme

The budget revolves around four engines of economic growth:

  1. Agriculture
  2. Micro, Small, and Medium Enterprises (MSMEs)
  3. Investment
  4. Exports

Key drivers of the budget:

  • Reforms act as the "fuel" for economic growth.
  • Inclusivity as the guiding principle.
  • Viksit Bharat as the ultimate destination.

The government aims to create a zero-poverty nation, universal education, comprehensive healthcare, and full employment while empowering women and farmers.

Part A: Growth and Development Measures

  1. Agriculture as the First Engine

The government has introduced Prime Minister Dhan-Dhaanya Krishi Yojana, covering 100 districts with low productivity to:

  • Enhance agricultural output.
  • Encourage crop diversification.
  • Improve irrigation and storage facilities.
  • Ensure credit availability for farmers.

Other Key Agricultural Initiatives

  • Mission for Aatmanirbharta in Pulses: A 6-year program focusing on Tur, Urad, and Masoor pulses.
  • Comprehensive Programme for Vegetables & Fruits: Boosting production and processing.
  • Makhana Board in Bihar: Support for Makhana farmers.
  • National Mission on High Yielding Seeds: Research and development of high-yield, climate-resilient seeds.
  • Fisheries Expansion: Sustainable harnessing of marine resources in Andaman & Nicobar and Lakshadweep.
  • Mission for Cotton Productivity: 5-year plan to improve cotton yield and sustainability.
  • Enhanced Kisan Credit Card (KCC): Loan limit raised from ₹3 lakh to ₹5 lakh.
  • Urea Plant in Assam: New plant in Namrup with 12.7 lakh metric tons capacity.
  1. MSMEs as the Second Engine
  • Revised MSME classification with investment and turnover limits raised by 2.5 times.
  • Enhanced Credit Guarantee Cover: Increased from ₹5 crore to ₹10 crore.
  • Customized Credit Cards for Micro Enterprises: ₹5 lakh limit for micro-businesses.
  • Fund of Funds for Startups: Additional ₹10,000 crore allocation.
  • Scheme for First-time Entrepreneurs: Special funding for women, SCs, and STs.
  • Employment-focused policies for labour-intensive sectors:
    • Footwear & Leather: ₹4 lakh crore turnover target.
    • Toy Sector: Development of sustainable toy clusters.
    • Food Processing: National Institute of Food Technology in Bihar.
  1. Investment as the Third Engine

Investing in People

  • Education & Skill Development:
    • 50,000 Atal Tinkering Labs in government schools.
    • Broadband connectivity for all government schools and health centers.
    • Expansion of IITs and Medical Colleges (10,000 new seats).
    • Centre of Excellence in AI for education.
  • Healthcare & Social Security:
    • Day Care Cancer Centres in all district hospitals (200 in 2025-26).
    • Social Security for Gig Workers under PM Jan Arogya Yojana.

Investing in Infrastructure

  • Public-Private Partnerships (PPPs) for infrastructure development.
  • ₹1.5 lakh crore allocated for interest-free loans to states for capital expenditure.
  • Second Asset Monetization Plan (2025-30) with ₹10 lakh crore investment.
  • Urban Challenge Fund of ₹1 lakh crore for urban redevelopment.
  • Nuclear Energy Mission: 100 GW by 2047, Small Modular Reactors (SMRs).
  • Shipbuilding Financial Assistance Policy for Indian shipyards.
  • Greenfield Airports in Bihar.
  • Jal Jeevan Mission extended till 2028 for full tap water coverage.

Investing in Innovation

  • ₹20,000 crore for Private Sector R&D Initiative.
  • Deep Tech Fund of Funds for next-generation startups.
  • PM Research Fellowship for 10,000 research scholars.
  • National Geospatial Mission for digital land records.
  • Gyan Bharatam Mission for digitizing India’s manuscript heritage.
  1. Exports as the Fourth Engine
  • Export Promotion Mission to enhance global trade.
  • BharatTradeNet (BTN) for seamless digital trade documentation.
  • Support for Global Capability Centers in tier-2 cities.
  • Infrastructure Upgradation for Air Cargo Exports.

Reforms as the Fuel

Tax Reforms

  • New Income Tax Bill to simplify the tax regime.
  • Customs tariff rationalization for industrial goods.
  • FDI in Insurance Sector raised from 74% to 100%.
  • Grameen Credit Score Framework for rural finance access.

 Regulatory Reforms

  • High-Level Committee for Regulatory Reforms for ease of doing business.
  • Investment Friendliness Index for states.
  • Jan Vishwas Bill 2.0 for further decriminalization of business laws.

Fiscal Policy

  • Fiscal Deficit for 2025-26 set at 4.4% of GDP.
  • ₹50.65 lakh crore total expenditure planned.
  • ₹14.82 lakh crore gross market borrowings.

Part B: Taxation and Revenue Measures

Indirect Tax Proposals

  • Customs Duty Reforms:
    • Tariff structure simplification.
    • Duty exemptions on 36 life-saving drugs (cancer, rare diseases).
    • Duty reduction on critical minerals, textiles, electronic components.
    • Encouraging domestic shipbuilding and electronics manufacturing.

Customs Duty Rate Changes

  • Reductions: Lower duties on marine exports, chemicals, waste metals, medicines, lithium-ion battery components, textiles, and IT/electronics parts.
  • Increases: Higher duties on certain textiles, electronics, and imported motor vehicles.
  • Tariff Adjustments: Structural changes in duty rates for various products to balance trade and domestic manufacturing interests.

Direct Tax Proposals

Personal Income Tax

  • No tax for income up to ₹12 lakh (₹12.75 lakh for salaried individuals).
  • New Tax Slabs:
    • ₹0-4 lakh: 0%
    • ₹4-8 lakh: 5%
    • ₹8-12 lakh: 10%
    • ₹12-16 lakh: 15%
    • ₹16-20 lakh: 20%
    • ₹20-24 lakh: 25%
    • ₹24 lakh and above: 30%
  • TDS/TCS Simplification: Thresholds increased for rent and interest income.
  • Tax Benefits for Startups: Incorporation period extended till 2030.
  • Incentives for International Financial Services Centre (IFSC).
  • Tax Benefits for Sovereign & Pension Fund Investments in Infrastructure.

Conclusion

The Budget 2025-26 is designed to drive economic growth, job creation, and technological innovation while strengthening the financial sector, boosting exports, and reforming tax laws. The focus remains on empowering farmers, MSMEs, youth, and the middle class to achieve the goal of Viksit Bharat.

Key Takeaways:

  • Strong focus on Agriculture, MSMEs, Investments, and Exports.
  • Massive investments in Infrastructure, Digitalization, and Skill Development.
  • Historic tax relief for middle-class taxpayers.
  • Increased support for Startups, R&D, and Green Energy.
  • Fiscal prudence maintained with 4.4% fiscal deficit target.

This budget sets a long-term growth trajectory while ensuring inclusive and sustainable development.