New Delhi, February 1:
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 today (February 1), marking her record eighth consecutive budget presentation. This budget, crafted against the backdrop of global uncertainties and a post-pandemic recovery phase, aims to alleviate the financial burden on the middle class, stimulate economic growth, and uphold fiscal discipline.
Economic Outlook: Paving the Way for Sustainable Growth
The Economic Survey preceding the budget projects India’s economic growth to be in the range of 6.3% to 6.8% for 2025-26. The survey emphasizes the need for structural reforms, deregulation, and strategic investment to reinforce the country’s medium-term growth potential. The budget reflects a strong commitment to driving investment activity, with a focus on resilience and sustainability in the face of global challenges.
Tax Reforms: A Landmark Relief for the Middle Class
In a move that resonates strongly with the middle class, Sitharaman announced that income up to Rs 12 lakh will now be exempt from taxation. This is set to provide significant relief to millions of taxpayers across the country. The revised income tax slabs are structured as follows:
- Up to Rs 4 Lakh: Nil
- Rs 4-8 Lakh: 5%
- Rs 8-12 Lakh: 10%
- Rs 12-16 Lakh: 15%
- Rs 16-20 Lakh: 20%
- Rs 20-25 Lakh: 24%
- Above Rs 25 Lakh: 30%
Taxpayers earning Rs 12 lakh annually will enjoy a rebate of Rs 80,000, while those with an income of Rs 18 lakh will benefit from a reduction of Rs 70,000 in their tax liability. This rationalization of tax slabs simplifies the tax structure and reduces the financial strain on middle-income households.
Fiscal Deficit and Revenue Projections: Striking a Balance
The budget outlines a prudent fiscal roadmap with the following key figures:
- FY25 Total Receipts: Rs 31.47 lakh crore
- Net Tax Receipts for FY25: Rs 25.5 lakh crore
- Fiscal Deficit for FY25: 4.8% of GDP
- FY26 Total Receipts: Rs 34.96 lakh crore
- Total Expenditure for FY26: Rs 50.65 lakh crore
- Net Tax Receipts for FY26: Rs 28.37 lakh crore
- Fiscal Deficit for FY26: Estimated at 4.4% of GDP
- Capital Expenditure for FY25: Rs 10.18 lakh crore
These figures reflect the government’s commitment to fiscal consolidation while ensuring sufficient capital outlay to drive growth.
Sector-Specific Announcements: A Comprehensive Development Agenda
- Middle-Class and Senior Citizens:
- Tax deduction limit for senior citizens doubled to Rs 1 lakh.
- TDS threshold on rent increased from Rs 2.4 lakh to Rs 6 lakh annually.
- TCS on educational loans waived to ease the financial burden on students and parents.
- Infrastructure and Transportation:
- Launch of greenfield airports in Bihar and a canal project in the Mithilanchal region to boost regional connectivity.
- Rs 25,000 crore Maritime Development Fund to strengthen India’s coastal infrastructure.
- Modified UDAN scheme to connect 120 new destinations, projected to benefit over four crore passengers in the next decade.
- Education and Skill Development:
- Establishment of 50,000 Atal Tinkering Labs to foster scientific curiosity in schools.
- Broadband connectivity in all government secondary schools.
- Expansion of IITs and medical education infrastructure to accommodate growing student numbers.
- Five National Centres of Excellence for skill development with global partnerships.
- Healthcare Initiatives:
- Setting up of daycare cancer centers in all district hospitals within three years.
- Promotion of medical tourism under the “Heal in India” initiative to position India as a global healthcare hub.
- Agriculture and Rural Development:
- PM Dhan Dhanya Krishi Yojana to enhance irrigation infrastructure across 100 districts.
- National Mission on high-yielding seeds and a six-year mission for self-reliance in pulses.
- Kisan Credit Card loan limit increased from Rs 3 lakh to Rs 5 lakh to support farmers’ credit needs.
- MSMEs and Startups:
- Enhanced credit cover for MSMEs from Rs 5 crore to Rs 10 crore.
- New schemes offering term loans up to Rs 2 crore for SC/ST and women entrepreneurs, promoting inclusive entrepreneurship.
- Technology and Innovation:
- National Geospatial Mission to modernize land records and support digital governance.
- Centre of Excellence in Artificial Intelligence with an allocation of Rs 100 crore to foster AI-driven innovations.
- Energy Sector Reforms:
- Development of 100 GW nuclear capacity by 2047 to strengthen India’s energy security.
- Amendments to the Atomic Energy Act to encourage private sector participation in nuclear energy projects.
- Social Welfare Programs:
- Expansion of Saksham Anganwadi and Poshan 2.0 programs to provide nutritional support to 8 crore children.
- Introduction of a social security scheme for online platform workers, ensuring their welfare in the gig economy.
Political Focus: Special Allocations for Bihar
In the run-up to the Bihar Assembly elections, the budget has earmarked special allocations for the state, including:
- Establishment of a Makhana board to promote local agriculture.
- Development of greenfield airports and canal projects to enhance infrastructure and connectivity.
Five Pillars of Union Budget 2025-26
- Accelerating Economic Growth: Focus on investment, infrastructure, and technology.
- Promoting Inclusive Development: Special emphasis on marginalized communities and underdeveloped regions.
- Stimulating Private Sector Investment: Creating a conducive environment for business and entrepreneurship.
- Enhancing Household Financial Security: Tax reforms and social welfare schemes aimed at boosting disposable income.
- Fostering a Resilient Middle Class: Measures to uplift the middle class and improve their quality of life.
The Union Budget 2025-26 is a forward-looking document that balances fiscal discipline with growth imperatives. With a strong focus on middle-class relief, infrastructure development, and structural reforms, it sets the stage for India to emerge as a resilient, inclusive, and globally competitive economy on its path to becoming a “Viksit Bharat” by 2047.
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