Building on the momentum of building a self-reliant India model, the Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, outlines a vision for an “Atmanirbhar Bharat.” This year’s budget is pivoted around four pillars: Agriculture, MSME, Investment, and Exports, with a focus on empowering key demographics, poor (Garib), youth, farmers (Annadata) and women (Nari).
The Brief:
- Agriculture: A comprehensive programme for Vegetables & Fruits, the National Mission on High Yielding Seeds, and increased loan limits for Kisan Credit Cards have been introduced.
- MSME: To promote the spirit of entrepreneurship, a new scheme for women, SC/ST, for first-time entrepreneurs will be launched. Customized credit cards and Alternate Investment Funds (AIFs) for startups will help improve credit accessibility for the people.
- Investment: In people, economy and innovations via schemes and missions like the Jal Jeevan Mission extension, Urban Challenge Fund, and Centre of Excellence in Artificial Intelligence.
- Exports: BharatTradeNet digital public infrastructure and National Framework for Global Capability Centres.
Social Welfare and Employment
- Poshan 2.0 and Saksham Anganwadi: Launch in aspirational districts and NE region.
- Online Platform Workers: Registration on the e-Shram portal and healthcare under PM Jan Arogya Yojana.
- Tourism: MUDRA loans for homestays, skill development programs, and performance-linked incentives.
- Skilling: National Centres of Excellence for Skilling will be set up with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing.
Economic Growth and Reforms
- Foreign Direct Investment (FDI): 100% FDI allowed in select sectors.
- National Framework for GCC: Guidance for states to promote Global Capability Centres.
- BharatTradeNet: Digital public infrastructure for international trade.
The Union Budget 2025-26 aims to drive India’s growth and prosperity through inclusive development, economic reforms, and infrastructure development with efforts to invigorate private sector investments, uplift household sentiments, and enhance the spending power of India’s rising middle class.
The Great Tax Shuffle: How Will the New Budget Impact You?
- Tax-Free Income Threshold: The tax-free income threshold has been increased from ₹7 lakh to ₹12 lakh per annum, providing relief to millions of salaried individuals
- Revised Tax Slabs: The new tax slabs are as follows:
– ₹12 lakh to ₹15 lakh: 5% tax
– ₹15 lakh to ₹20 lakh: 10% tax
– ₹20 lakh to ₹25 lakh: 15% tax
– ₹25 lakh to ₹30 lakh: 20% tax
– Above ₹30 lakh: 25% tax
- Increased Rebate: The rebate under Section 87A has been increased from ₹25,000 to ₹60,000, further reducing the tax liability for middle-class individuals
- Simplified Tax Structure: The new tax structure aims to simplify the tax calculation process, making it easier for taxpayers to understand and comply with tax laws
- Relief for Salaried Employees: Salaried employees with income up to ₹12.75 lakhs in the new tax regime will pay nil income tax
- Tax Benefits for Self-Occupied Properties: Taxpayers can now claim tax benefits for two self-occupied residences, a significant alteration from the prior regulation that permitted relief for only one home
A Deeper Dive into the Union Budget 2025-26:
E-commerce and Digital Payments
The budget acknowledges the significant role of e-commerce in driving economic growth. To promote digital payments, the government has proposed the expansion of the India Post Payments Bank, which will provide financial services to underserved communities. Additionally, the budget mentions the development of Bharat Trade Net, a digital public infrastructure for international trade.
Fintech and Startups: A Boost to Innovation
The government has introduced several initiatives to support the growth of fintech and startups, including:
- First-Time Entrepreneurs: A new Scheme will be launched for 5 lakh women, as well as Scheduled Castes and Scheduled Tribes, for first-time entrepreneurs. This will provide term loans up to two crores during the next 5 years.
- Customized Credit Cards: Micro-enterprises registered on the Udyam Portal will be eligible for customized credit cards with a limit of ₹ 5 lakh.
- Fund for Startups: A new fund of funds will be set up to support startups, in addition to the existing ₹1,000 crore Fund of Funds for Startups.
Technology and Innovation: Driving Growth
The budget highlights the importance of technology and innovation in driving economic growth. Key initiatives include:
- National Institute of Excellence for Skilling: A new institute will be set up in partnership with global institutions to provide skilling programs for Indian youth.
- Centre of Excellence (CoE) in AI: Building on the success of CoE in AI to promote agriculture, health and sustainable cities in 2023, a Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of ₹ 500 crore.
- Deep Tech Fund of Funds: A Deep-Tech Fund of Funds will also be explored to catalyze the next generation of startups as a part of this initiative.
- Gyan Bharatam Mission: A mission to survey, document and conserve our manuscript heritage with academic institutions, museums, libraries, and private collectors will be undertaken to cover more than one crore manuscripts. The government will set up a National Digital Repository of Indian knowledge systems for knowledge sharing.
- KYC Simplification: To implement the earlier announcement on simplifying the KYC process, the revamped Central KYC Registry will be rolled out in 2025. To be updated periodically.
Investment and Exports: A Thrust to Growth
The budget outlines several initiatives to promote investment and exports, including:
- Investment in Infrastructure: The government will invest in infrastructure development, including roads, railways, and ports, by boosting existing schemes like UDAN, the power sector, maritime reforms etc.
- Bharat Trade Net: A digital public infrastructure, ‘BharatTradeNet’ (BTN) for international trade will be set up as a unified platform for trade documentation and financing solutions. This will complement the Unified Logistics Interface Platform. The BTN will be aligned with international practices.
- PM GATISHAKTI: For furthering PPPs and assisting the private sector in project planning, access to relevant data and maps from the PM Gati Shakti portal will be provided.
- Export Promotion: The budget proposes the establishment of a digital public infrastructure, Bharat Trade Net, to facilitate international trade.
- Foreign Direct Investment (FDI): The government will allow 100% FDI in select sectors to attract foreign investment.
Conclusion
The Union Budget 2025-26 presents a comprehensive blueprint for inclusive growth, with a focus on empowering marginalized communities, promoting digital payments, and supporting the growth of startups and fintech innovations. While some sectors, such as online gaming and EVs, may not have received explicit attention, the government’s ongoing initiatives and focus on technology and innovation are likely to have a positive impact on these industries.
