Summary of the Union Budget 2025-26

Union Budget 2025-26

Union
Budget 2025-26: A Comprehensive Overview of Key Highlights and Reforms

The Union
Budget 2025-26, presented by Union Minister of Finance and Corporate Affairs
Smt. Nirmala Sitharaman, is a visionary roadmap for India’s journey toward
becoming a Viksit Bharat (Developed India). With the
theme “Sabka Vikas” (Development for All), the budget focuses
on inclusive growth, economic resilience, and transformative reforms across
sectors. This article delves into the key highlights, reforms, and implications
of the Union Budget 2025-26, covering every aspect from agriculture to
taxation, MSMEs, investments, and exports.

 

Key Themes and Principles of Viksit Bharat

The budget
is guided by the principles of Viksit Bharat, aiming to achieve:

1. Zero Poverty
2. 100% Quality School Education
3. Affordable and Comprehensive Healthcare
4. 100% Skilled Labor with Meaningful Employment
5. 70% Women in Economic Activities
6. Farmers as the Backbone of India’s Food Security

These
principles underscore the government’s commitment to balanced growth,
inclusivity, and empowerment of all sections of society.

 

Four Engines of Growth: Agriculture, MSMEs,
Investment, and Exports

1. Agriculture: Prime Minister Dhan-Dhaanya Krishi
Yojana

• Objective: Boost
  productivity, crop diversification, and rural prosperity.
• Key Initiatives:
• Mission for Aatmanirbharta in Pulses: A 6-year mission focusing on Tur, Urad, and Masoor pulses.
• Kisan Credit Card Loan Limit Increased: From ₹3 lakh to ₹5 lakh.
• Rural Prosperity Programme: Skilling,
  investment, and technology adoption to address underemployment.
• National Mission on High-Yielding Seeds and Cotton Productivity: To enhance agricultural output.

2. MSMEs: Powering India’s Growth

• Enhanced Classification Limits: Investment
  and turnover limits for MSMEs increased to 2.5x and 2x, respectively.
• New Scheme for Women and Marginalized Groups: Term loans up to ₹2 crore for 5 lakh first-time
  entrepreneurs.
• Global Hub for Toys: Promoting
  the ‘Made in India’ brand.
• National Manufacturing Mission: Strengthening
  small, medium, and large industries.

3. Investment: Fueling Innovation and
Infrastructure

• Atal Tinkering Labs: 50,000
  labs to be set up in government schools.
• BharatNet Expansion: Broadband
  connectivity for rural schools and health centers.
• Artificial Intelligence Centre of Excellence: ₹500 crore outlay for AI in education.
• Asset Monetization Plan 2025-30: ₹10
  lakh crore to be reinvested in new projects.
• Urban Challenge Fund: ₹1
  lakh crore for city redevelopment and water sanitation.

4. Exports: Driving Global Competitiveness

• BharatTradeNet (BTN): A
  unified digital platform for trade documentation and financing.
• Support for Domestic Manufacturing: Integration with global supply chains and Industry 4.0.
• Infrastructure Upgradation: Enhanced
  warehousing and air cargo facilities for perishable goods.

 

Trend Deficit

Reforms as the Fuel for Growth

The budget
emphasizes reforms as the driving force behind India’s growth
trajectory. Key reforms include:

Financial Sector Reforms

• FDI Limit in Insurance Increased: From
  74% to 100%.
• Jan Vishwas Bill 2.0: Decriminalization
  of over 100 legal provisions to ease compliance.
• Investment Friendliness Index: Ranking
  states to promote competitive federalism.

Taxation Reforms

• New Income Tax Slabs:
• 0–4 Lakh: Nil
• 4–8 Lakh: 5%
• 8–12 Lakh: 10%
• 12–16 Lakh: 15%
• 16–20 Lakh: 20%
• 20–24 Lakh: 25%
• Above 24 Lakh: 30%
• TDS/TCS Rationalization: Increased
  thresholds for senior citizens and rent payments.
• Vivad Se Vishwas Scheme: Over
  33,000 taxpayers have settled disputes.

Fiscal Consolidation

• Fiscal Deficit Targets:
• 2024-25 (Revised Estimate): 4.8%
  of GDP
• 2025-26 (Budget Estimate): 4.4%
  of GDP
• Capital Expenditure: ₹10.18
  lakh crore in 2024-25, with a focus on infrastructure development.

 

Key Highlights of Part B: Direct Tax Proposals

• Tax Relief for Middle Class: No
  tax for income up to ₹12 lakh annually.
• Standard Deduction: Increased
  to ₹75,000 for salaried individuals.
• Senior Citizen Benefits: Higher
  TDS thresholds and exemptions for NPS withdrawals.
• Ease of Doing Business: Simplified
  international taxation and presumptive taxation for non-residents.

 

Sector-Specific Initiatives

Healthcare and Lifesaving Drugs

• Customs Duty Exemptions: 36
  lifesaving drugs and 37 medicines for cancer, rare diseases, and chronic
  conditions.

Domestic Manufacturing and Value Addition

• Critical Minerals: Exemptions
  on cobalt powder, lithium-ion battery waste, and 12 other minerals.
• Textile Industry: Reduced
  duties on shuttle-less looms and knitted fabrics.
• Electronics Manufacturing: Incentives
  for EV and mobile phone battery production.

Export Promotion

• Handicrafts and Leather: Duty
  exemptions on wet blue leather and reduced duties on fish products.

 

Conclusion: A Budget for Viksit Bharat

The Union
Budget 2025-26 is a bold and transformative blueprint for India’s future. By
focusing on inclusive growth, economic resilience,
and global competitiveness, the budget aims to empower every
citizen, from farmers and women to the middle class and entrepreneurs. With its
emphasis on reforms, innovation, and sustainability,
the budget paves the way for India to achieve its vision of becoming a Viksit
Bharat by 2047.

This budget not only addresses immediate
economic challenges but also lays the foundation for long-term growth, ensuring
that India remains a global leader in the 21st century.

UPSC PYQs on Union Budget: