Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in Parliament on 1st Feb,2025 , marking her eighth budget and the first of Prime Minister Narendra Modi’s third term. This year’s budget emphasizes economic growth, tax reforms, infrastructure expansion, and key welfare initiatives. With a focus on sustainable development and fiscal stability, it aims to drive investment, boost employment, and strengthen India’s economic trajectory in the coming years.
NEW DELHI: The Union Budget for the financial year 2025-26 was presented in Parliament today by Finance Minister Nirmala Sitharaman. This marks her eighth budget and the first in Prime Minister Narendra Modi’s third term. The budget focuses on economic growth, tax reforms, infrastructure development, and welfare initiatives.
Major Tax Announcements
One of the most significant announcements is that no income tax will be payable up to Rs.12 lakh under the new regime. Additionally, a new Income Tax Bill will be introduced next week. Changes in tax slabs are expected across all categories, with individuals earning over Rs. 24 lakh required to pay 30% tax. The tax return filing limit has also been extended from 2 years to 4 years.
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Finance Minister Sitharaman highlighted the government’s efforts to make tax filing simpler. She stated, “Trust first, scrutinize later”, emphasizing the government’s commitment to making compliance easier.
Infrastructure and Capital Expenditure
The revised capital expenditure (capex) for FY25 stands at Rs. 10.18 lakh crore. To boost urban growth, the government has launched a Rs. 1 lakh crore Urban Challenge Fund, which will support redevelopment projects and improve urban infrastructure.
The Finance Minister announced Rs. 1.5 lakh crore in interest-free loans for capital expenditure, with incentives to encourage reforms. Additionally, 40,000 affordable housing units will be completed in FY26 under the new SWAMI Fund 2 worth Rs. 15,000 crore.
Customs and Import Duty Reforms
The government is simplifying the customs tariff structure by removing seven additional tariff rates, bringing the total to just eight, including a zero rate. The Finance Minister stated that no more than one cess or surcharge will be levied. Social welfare surcharge will be removed from 82 tariff lines.
Among the key exemptions:
- Full exemption of Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, and 12 critical minerals.
- New exemptions on 37 medicines and 13 patient assistance programs.
- Reduction in BCD for key products such as frozen fish paste, leather, and interactive flat panel displays.
Financial Sector and FDI Reforms
To encourage foreign investment, the FDI limit in insurance has been raised from 74% to 100% for companies that reinvest all premiums within India.
A revamped central KYC registry will be introduced, along with regulatory reforms to make the financial sector more responsive. A state-wise Investment Friendliness Index will be launched to encourage competitive federalism.
Agriculture and Rural Development
A new Jan Dhanya Krishi Yojana will focus on boosting agricultural productivity in 100 districts with lower credit access. The plan includes crop diversification, better irrigation, and enhanced storage.
The government has also announced a 6-year mission to achieve self-reliance in pulses, particularly tur and masoor. Additionally, a Makhana Board will be set up in Bihar.
Kisan Credit Cards (KCC) will continue to benefit 7.7 crore farmers, with the loan limit under the scheme increasing from Rs. 3,000 to Rs. 5,000.
Support for MSMEs and Manufacturing
Micro, Small, and Medium Enterprises (MSMEs) contribute 45% of India’s exports and will receive targeted financial support. The budget introduces:
- Customized credit cards for MSMEs
- A new Fund of Funds for startups
- Increased investment limits for MSMEs (by 2.5 times) and turnover limits (by 2 times)
The leather and footwear industry will receive new incentives to boost exports to Rs. 1.1 lakh crore and create 22 lakh jobs. A new toy industry scheme will focus on cluster-based production and skill enhancement.
Power and Clean Energy Initiatives
A Nuclear Energy Mission has been launched to achieve 100 GW of nuclear power by 2047. The government will amend the Atomic Energy Act to encourage private sector investment. A Rs. 20,000 crore R&D initiative will develop Small Modular Reactors (SMRs), with five indigenous SMRs expected to be operational by 2033.
Aviation and Connectivity
The UDAN scheme has already connected 88 airports and facilitated travel for 1.5 crore people. A modified version will expand routes to cover 120 new destinations, targeting 4 crore additional passengers. New greenfield airports will also be developed in Bihar.
Education and Skill Development
To invest in human capital, the government is prioritizing initiatives such as:
- Sashakt Anganwadi and Poshan 2.0 for 8 crore children and women
- Expanded infrastructure in 5 IITs to accommodate 6,500 more students
- 5 National Centres of Excellence for skill development
- Registration of 1 crore gig workers on the e-Shram portal
Key Budget Figures
- Revised fiscal deficit for FY25: 4.8%
- Targeted fiscal deficit for FY26: 4.4%
- Revised total receipts (excluding borrowings): ₹31.47 lakh crore
- Net tax receipts: Rs. 25.57 lakh crore
- Revised total expenditure: Rs. 47.16 lakh crore
- Capital expenditure: Rs. 10.1 lakh crore
Bihar Gets Major Infrastructure Boost in Union Budget 2025
During the Budget 2025 presentation, Finance Minister Nirmala Sitharaman announced key developments for Bihar, including a new airport, expansion of Patna airport, and a Makhana Board to boost production and processing. The Centre will also provide financial aid for the western Kosi canal, benefiting 50,000 hectares in Mithilanchal, and support IIT Patna’s capacity expansion.
A National Institute of Food Technology, Entrepreneurship, and Management will be set up in Bihar, alongside greenfield airports to meet future demands. Under a revamped UDAN scheme, regional connectivity will expand to 120 new destinations, benefiting smaller airports and helipads. The Budget aims to drive economic growth, private investments, and middle-class aspirations while strengthening infrastructure nationwide.
The Union Budget 2025 aims to drive economic growth through tax reforms, infrastructure investment, and sectoral support. As the Finance Minister stated, “Together, we aim to unlock India’s potential under the visionary leadership of Prime Minister Modi.” The PM calls this budget a “force multiplier”.
With a strong focus on boosting investment, financial reforms, and improving the quality of life for citizens, this budget lays a strong foundation for a Viksit Bharat and long-term economic growth.
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