Prologue
- The tax exemption threshold has been raised to ₹12 lakh, providing relief to middle-class taxpayers. The standard deduction for salaried employees has also increased to ₹75,000, boosting disposable income.
- The government has retained a capital expenditure target of ₹11.11 lakh crore to strengthen infrastructure, with major allocations for highways, railways, and urban development.
- The PM Dhan-Dhaanya Krishi Yojana targets 100 districts to benefit 1.7 crore farmers. Additionally, ₹20,000 crore has been allocated to private sector-led research, development, and innovation.
Budget Estimates 2025-26
- Expenditure: The government is estimated to spend Rs 50,65,345 crore in 2025-26, 7.4% higher than the revised estimate of 2024-25. Interest payments account for 25% of the total expenditure, and 37% of revenue receipts.
- Receipts: The receipts (other than borrowings) in 2025-26 are estimated to be Rs 34,96,409 crore, about 11.1% higher than the revised estimate of 2024-25. Tax revenue which forms major part of the receipts is also expected to increase by 11% over the revised estimate for 2024-25.
- GDP: The government has estimated a nominal GDP growth rate of 10.1% in 2025-26 (i.e., real growth plus inflation).
Engines of Development
The Union Budget 2025 lays the foundation for India’s long-term economic growth by prioritizing key sectors that drive national development. The budget focuses on multiple “engines of development” to stimulate economic expansion, create jobs, improve infrastructure, and ensure social welfare. These engines are as follows:
