Union Budget 2025-26: A Detailed Analysis of India’s Roadmap to Viksit Bharat

Introduction

On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament, positioning it as a transformative blueprint to guide India towards becoming a Viksit Bharat (Developed India) by 2047. This budget not only emphasizes inclusive growth, infrastructure development, and economic reforms but also addresses the aspirations of farmers (Annadata), women (Nari), youth (Yuva), and the poor (Garib).

Let’s dive deep into each segment of this budget to understand how it impacts various sectors of the economy and every section of society.

Budget Theme and Vision : The Path to Viksit Bharat

The Union Budget 2025-26 is built on the foundational belief that “a country is not just its soil; it is its people.” Inspired by this philosophy, the budget aims to :

Accelerate Economic Growth : Propel India as the fastest-growing major economy in the world.

Secure Inclusive Development : Ensure every citizen, regardless of socio-economic status, benefits from growth.

Invigorate Private Sector Investments : Enhance the role of private enterprises in nation-building.

Empower the Middle Class : Strengthen the purchasing power and financial stability of India’s burgeoning middle class.

Enhance Household Sentiments : Foster optimism about economic opportunities and stability

Agriculture and Rural Development : Empowering Annadata

Agriculture remains at the heart of India's development, and this budget introduces several initiatives to uplift farmers and the rural economy.

a) Prime Minister Dhan-Dhaanya Krishi Yojana

Inspired by the success of the Aspirational Districts Programme, this scheme targets 100 districts with low agricultural productivity:

Enhance Productivity : Introduce modern techniques to boost yields.

Crop Diversification : Encourage farmers to grow a variety of crops for higher profitability.

Post-Harvest Storage : Establish storage facilities at the panchayat and block levels to reduce wastage.

Irrigation & Credit : Improve irrigation facilities and facilitate long-term and short-term credit access.

Impact : Likely to benefit 1.7 crore farmers across the country.

b) Aatmanirbharta in Pulses

6 years, focusing on Tur, Urad, and Masoor.

Develop and distribute climate-resilient seeds.

Improve protein content and productivity.

Enhance post-harvest storage and guarantee remunerative prices to farmers.

c) National Mission on High-Yielding Seeds

Focus on Strengthening the research ecosystem and Propagation of seeds with high yield, pest resistance, and climate resilience.

d) Enhanced Credit through Kisan Credit Card (KCC)

Loan Limit Increased From ₹3 lakh to ₹5 lakh for 7.7 crore farmers, including fishermen and dairy farmers.

e) Makhana Board in Bihar

Improve production, processing, and marketing of Makhana in Bihar, with support for Farmer Producer Organizations (FPOs).

Empowering MSMEs : The Growth Engine of India

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of India’s economy. The budget provides a robust framework for their growth and modernization.

a) Revision of MSME Classification Criteria : Investment and Turnover Limits Increased

Micro Enterprises: Investment limit raised to ₹2.5 crore, turnover to ₹10 crore.

Small Enterprises: Investment up to ₹25 crore, turnover to ₹100 crore.

Medium Enterprises: Investment raised to ₹125 crore, turnover to ₹500 crore.

b) Credit Enhancements : Credit Guarantee Cover Increased

Micro & Small Enterprises: From ₹5 crore to ₹10 crore.

Startups: From ₹10 crore to ₹20 crore.

Exporter MSMEs: Term loans up to ₹20 crore will have significant guarantee cover.

c) Credit Cards for Micro Enterprises

Udyam-registered micro enterprises will be eligible for customized credit cards with a limit of ₹5 lakh. 10 lakh cards will be issued in the first year.

d) Support for First-Time Entrepreneurs

A new scheme targeting 5 lakh first-time entrepreneurs, including women, Scheduled Castes, and Scheduled Tribes, offering term loans up to ₹2 crore over the next 5 years.

Infrastructure and Investment: Building the Foundation for Growth

The budget outlines a comprehensive plan for massive infrastructure development to stimulate the economy and generate employment.

a) Public-Private Partnerships (PPP)

3-Year Project Pipeline, Ministries will develop a 3-year pipeline of projects suitable for PPP implementation.

b) Support to States for Infrastructure

Outlay of ₹1.5 lakh crore, Interest-free 50-year loans to states for capital expenditure and reforms.

c) Asset Monetization Plan (2025-30)

₹10 lakh crore to be raised from asset monetization to fund new projects.

d) Urban Development Initiatives

Urban Challenge Fund: ₹1 lakh crore allocated to develop cities as growth hubs.

Jal Jeevan Mission: Extended till 2028 to achieve 100% rural tap water connectivity.

e) Power Sector Reforms

States will receive incentives for electricity distribution reforms and strengthening intra-state transmission networks.

Tax Reforms : Simplification and Relief for All

One of the most awaited aspects of any budget is tax reforms, and Budget 2025-26 delivers significant changes, particularly for the middle class.

a) Personal Income Tax Reforms : New Income Tax Slabs Introduced

Highlights
No tax for individuals earning up to ₹12 lakh annually (₹12.75 lakh for salaried individuals after standard deductions)
Senior Citizens: Interest income deduction limit doubled from ₹50,000 to ₹1 lakh.

b) Simplification of TDS/TCS

TDS on Rent: Increased threshold from ₹2.4 lakh to ₹6 lakh.

Voluntary Compliance Encouraged: Time limit to file updated returns extended from 2 years to 4 years.

c) Corporate and Sectoral Tax Reforms

Rationalization of Customs Tariffs: Simplified tariff structure and removal of redundant cess/surcharges.

Boost for Electronics and EV Manufacturing: Duty exemptions and incentives to promote domestic production

Human Development and Social Welfare : Investing in People

The budget places significant emphasis on health, education, and social welfare, ensuring that economic growth translates into human development.

a) Education Initiatives

Atal Tinkering Labs : 50,000 labs to be established in government schools.

Centre of Excellence in AI for Education : A ₹500 crore initiative to integrate AI into the education system.

b) Healthcare Initiatives

Day Care Cancer Centres : To be established in all district hospitals within 3 years.

PM Jan Arogya Yojana : Extended healthcare coverage for gig workers through the e-Shram portal.

c) Social Welfare Programs

PM SVANidhi : Enhanced loans and UPI-linked credit cards for street vendors.

Welfare of Online Platform Workers : Social security benefits introduced for gig economy workers

Fiscal Discipline and Deficit Management : Ensuring Economic Stability

The budget outlines a disciplined fiscal trajectory while ensuring sufficient investments in growth areas.

Fiscal Deficit : Targeted at 4.4% of GDP for 2025-26, reduced from 4.8% in 2024-25.

Expenditure : Total expenditure estimated at ₹50.65 lakh crore, with capital expenditure at ₹10.18 lakh crore.

Borrowings : Net market borrowings projected at ₹11.54 lakh crore

Conclusion : Marching Towards a Developed India

The Union Budget 2025-26 serves as a comprehensive roadmap for India's growth over the next decade. By focusing on inclusive development, empowering key economic sectors, and simplifying the tax structure, this budget lays the groundwork for India to emerge as a global economic powerhouse.

With targeted reforms and strategic investments, the budget ensures that every Indian benefits from the nation’s progress. The journey to Viksit Bharat is well underway, and this budget is a crucial milestone on that path.

Stay connected with Finblage for more insights, analyses, and updates on how these budgetary changes impact investors, traders, and the financial markets!

Disclaimer

The content provided in this article is for informational purposes only and reflects a comprehensive summary of the Union Budget 2025-26 as presented by the Government of India. While every effort has been made to ensure the accuracy and reliability of the information, Finblage does not guarantee its completeness or suitability for any particular purpose.

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