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).
- Deficits: Revenue deficit in 2025-26 is targeted at 1.5% of GDP. This is lower than the revised estimate of 1.9% in 2024- 25. Fiscal deficit in 2025-26 is targeted at 4.4% of GDP, lower than the revised estimate of 4.8% of GDP in 2024-25.
- Debt: The central government aims to reduce its outstanding liabilities to around 50% of GDP by March 2031. In 2025- 26, outstanding liabilities are estimated to be 56.1% of the GDP.
The Budget outlines sustained efforts focused on the following priorities:
The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, outlines a strategic roadmap for India’s economic growth, fiscal management, and social development. With a strong focus on infrastructure, innovation, rural welfare, and job creation, the budget aims to sustain economic momentum while ensuring inclusive development. Key highlights include tax relief for individuals, enhanced agricultural support, increased capital expenditure, and incentives for research and manufacturing. Emphasizing self-reliance and sustainability, the budget seeks to balance fiscal consolidation with economic expansion, positioning India for long-term growth and global competitiveness.
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:
AGRICULTURE AS THE 1st ENGINE OF DEVELOPMENT
- Prime Minister Dhan-Dhaanya Krishi Yojana – Developing Agri Districts Programme – The programme to be launched in partnership with the states, covering 100 districts with low productivity, moderate crop intensity and below-average credit parameters, to benefit 1.7 crore farmers.
- Building Rural Prosperity and Resilience – A comprehensive multi-sectoral programme to be launched in partnership with states to address underemployment in agriculture through skilling, investment, technology, and invigorating the rural economy. Phase-1 to cover 100 developing agri-districts.
- Aatmanirbharta in Pulses – Government to launch a 6-year “Mission for Aatmanirbharta in Pulses” with focus on Tur, Urad and Masoor. NAFED and NCCF to procure these pulses from farmers during the next 4 years.
- Comprehensive Programme for Vegetables & Fruits – A comprehensive programme to promote production, efficient supplies, processing, and remunerative prices for farmers to be launched in partnership with states.
- Makhana Board in Bihar – A Makhana Board to be established to improve production, processing, value addition, and marketing of makhana.
- National Mission on High Yielding Seeds – A National Mission on High Yielding Seeds to be launched aiming at strengthening the research ecosystem, targeted development and propagation of seeds with high yield, and commercial availability of more than 100 seed varieties.
- Fisheries – Government to bring a framework for sustainable harnessing of fisheries from Indian Exclusive Economic Zone and High Seas, with a special focus on the Andaman & Nicobar and Lakshadweep Islands
- Mission for Cotton Productivity – A 5-year mission announced to facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties.
- Enhanced Credit through KCC – The loan limit under the Modified Interest Subvention Scheme to be enhanced from ₹ 3 lakh to ₹ 5 lakh for loans taken through the KCC.
