India’s Union Budget 2025

By Anamika Chaurasiya

Introduction

The Union Finance Minister acknowledged four development engines in the Union Budget 2025, which was submitted to the Parliament: exports, investment, micro, small, and medium-sized enterprises (MSME), and agriculture. The goal of the Sabka Vikas theme of the Union Budget 2025 is to promote balanced growth in all areas. According to the topic of the budget, the finance minister described the general tenets of Viksit Bharat.

What are the Four Engines of Development in the Union Budget 2025?

  • 1st Engine- Agriculture
    • Prime Minister Dhan-Dhaanya Krishi Yojana: 1.7 crore farmers would benefit from the planned improvements to irrigation and post-harvest storage facilities in 100 areas with low agricultural production. To solve agricultural underemployment, a program called “Rural Prosperity and Resilience” will be introduced in collaboration with states, utilizing technology, investment, and skill development.
    • Atma Nirbharta in Pulses: Climate-resilient seeds and competitive pricing are guaranteed by the commencement of a 6-year project that focuses on Tur, Urad, and Masoor. Over the following four years, NAFED and NCCF, two central agencies, will be ready to purchase these three pulses from farmers.
    • Enhanced Kisan Credit Card (KCC) Limit: To help 7.7 crore farmers get financing, the amount was increased from ₹3 lakh to ₹5 lakh.
    • National Mission on High Yielding Seeds: To support research and guarantee the supply of more than 100 high-yielding, pest-resistant seed types.
    • Mission for Cotton Productivity: An effort to improve quality, increase output of extra-long staple cotton, and encourage sustainable farming over a five-year period.
    • Makhana Board in Bihar: Created to improve Makhana’s value addition, processing, and production.
    • Comprehensive Program for Fruits and Vegetables: To guarantee improved market pricing for farmers and encourage effective supply networks.
    • Fisheries Development: Andaman & Nicobar and Lakshadweep are the focus of a new framework for sustainable fishing in the Indian High Seas and Exclusive Economic Zone.
    • Urea Plant in Assam: A new 12.7 lakh metric ton urea factory to increase agricultural production is located on the grounds of Brahmaputra Valley Fertilizer Corporation Ltd (BVFCL).
  • 2nd Engine- MSMEs
    • Revised MSME Classification: By raising the investment and turnover restrictions to 2.5 times, small enterprises now have more access to loans.
    • Micro Enterprise Credit Cards: A Rs 5 lakh lending facility that encourages economic engagement and financial inclusion for 10 million microbusinesses.
    • Credit Cover for MSMEs: Higher loan availability was made possible by the rise in guarantee cover from ₹5 crore to ₹10 crore.
    • Focus Product Scheme for Leather and Footwear: 22 lakh employment, ₹4 lakh crore in revenue, and more than ₹1.1 lakh crore in exports are anticipated.
    • Toy Sector Development: The ‘Made in India’ brand is being promoted in international markets by clusters and innovation-based manufacturing.
    • National Institute of Food Technology: To encourage food processing, skill development, and entrepreneurship, a National Institute of Food Technology, Entrepreneurship, and Management is set to be founded in Bihar.
    • Fund of Funds for Startups: To be developed with a broader scope and a ₹10,000 crore extra contribution.
  • 3rd Engine- Investment
    • Urban Challenge Fund: With ₹10,000 crore set aside for 2025–2026, ₹1 lakh crore will be invested in promoting “Cities as Growth Hubs,” “Creative Redevelopment of Cities,” and “Water and Sanitation.”
    • Jal Jeevan Mission: Increasing financing for rural water projects and guaranteeing universal piped water coverage by 2028 with a total budget investment of Rs 67,000 Crore.
    • Maritime Development Fund: Fund of ₹25,000 crore, of which 49% is contributed by the government, to assist long-term funding for ports, logistical infrastructure, and shipbuilding.
    • Expansion of IITs: More infrastructure would increase India’s technical education capacity by accommodating an additional 6,500 students. 10,000 grants are available for PM Research grants at IITs and IISc for advanced research.
    • Day Care Cancer Centers: To ensure accessible and reasonably priced cancer care by opening 200 centers in 2025–2026 and in all district hospitals during the following three years.
    • Bharatiya Bhasha Pustak Scheme: Digital Indian language books to improve access to education at the school and university levels.
    • Nuclear Energy Mission for Viksit Bharat: Small modular reactors (SMRs) will be established with an investment of ₹20,000 crore, and by 2033, at least five SMRs that were created domestically would be operational.
    • UDAN – Regional Connectivity Scheme: With the goal of transporting 4 crore passengers over the next ten years, a redesigned UDAN project would improve regional connectivity to 120 additional locations.
    • Greenfield Airport in Bihar: In addition to the extension of Patna airport and the construction of a brownfield airport at Bihta (Patna), greenfield airports will be created in Bihar.
    • Western Koshi Canal ERM Project: Funding for Mithilanchal, Bihar’s irrigation infrastructure.
    • Tourism for Employment-led Growth: Through a challenge mode, states will collaborate to build the top 50 tourism spots in the nation.
  • 4th Engine- Export Promotion
    • Export Promotion Mission: The Ministries of Commerce, MSME, and Finance will work together to create it, with sectoral and ministerial goals.
    • BharatTradeNet (BTN): A single online platform that makes it easier to finance and document international trade.
    • National Framework for GCC: Promoting outsourcing hubs (Global Capability Centers) in developing Tier-2 cities through policy incentives.
    • Warehousing Facility for Air Cargo: A creation of infrastructure for storing valuable perishable exports.

Also read: Union Budget 2024-2025

What are Other Major Highlights of the Union Budget 2025?

  • Taxation and Financial Reforms
    • Direct Taxes: No income tax is applied to yearly incomes up to ₹12 lakh; for salaried taxpayers with deductions, this amount is increased to ₹12.75 lakh.
    • Tax Deducted at Source (TDS): The burden of tax compliance was lessened when the TDS on rent raised from ₹2.4 lakh to ₹6 lakh.
    • Tax Returns: In order to encourage voluntary tax compliance, the deadline for revised tax returns was extended from two to four years.
    • Basic Customs Duty (BCD) Exemptions: BCD does not apply to 36 life-saving medications for uncommon, chronic, or cancerous conditions.
Income (in ₹)Tax Rate
₹0 – ₹4 lakhNil
₹4 – ₹8 lakh5%
₹8 – ₹12 lakh10%
₹12 – ₹16 lakh15%
₹16 – ₹20 lakh20%
₹20 – ₹24 lakh25%
Above ₹24 lakh30%
  • Social Welfare and Inclusion
    • PM SVANidhi Scheme: Street sellers can benefit from UPI-linked credit cards with a ₹30,000 limit to improve financial inclusion.
    • Identity Cards for Gig Workers: Social security and health benefits under the PM Jan Arogya Yojana are guaranteed by registering on the e-Shram site.
    • 50,000 Atal Tinkering Labs: Must be implemented in government schools during the next five years in order to encourage creativity.
    • Expansion of Medical Education: 10,000 more seats for medical care, with a five-year goal of increasing seats by 75,000.
  • Financial Sector Reforms
    • Grameen Credit Score: A structure that makes it easier for SHG members and rural borrowers to get official credit facilities.
    • Jan Vishwas Bill 2.0: Decriminalizing over a hundred law provisions, simplifying corporate processes, and lowering the burden of regulatory compliance.
    • SWAMIH Fund 2.0: A fund of ₹15,000 crore, contributed by the government, banks, and private investors, would be used to finish one lakh extra housing units.
    • FDI in Insurance Sector: For corporations that spend their whole premium in India, the FDI ceiling in the insurance sector would be raised from 74% to 100%.
    • Investment Friendliness Index of States: Competitive cooperative federalism is being promoted via a new rating system for states.
    • Credit Enhancement Facility: NaBFID will create a “Partial Credit Enhancement Facility” to help finance infrastructure-related business bonds.
    • Pension Sector: There will be a seminar for the development of pension products and regulatory cooperation.
    • High-Level Committee for Regulatory Reforms: Advanced Level C There will be a High-Level Committee to examine all non-financial sector rules, licenses, and certifications.
  • Major Sources of Revenue from the Budget
    • Income Tax – 22%
    • Union Excise Duties – 5%
    • GST and Other Taxes – 18%
    • Corporation Tax – 17%
    • Borrowing and Other Liabilities – 24%
    • Nom-Tax Recepits – 9%
    • Non-Debt Capital Recepits – 1%
    • Customs – 4%
  • Major Sources of Expenditure from the Budget
    • Pensions – 4%
    • Interest Payments – 20%
    • Central Sector Scheme – 16%
    • Major Subsidies – 6%
    • Defence – 8%
    • States Share of Taxes and Duties – 22%
    • Finance Comission and Other transfers – 8%
    • Centrally Sponsored Scheme – 8%
    • Other Expenditure – 8%
  • Major Central Govt Expenditure (Budget Estimates)
Union Budget 2025

Conclusion

With its focus on “Sabka Vikas,” the Union Budget 2025 establishes a solid basis for Viksit Bharat by encouraging economic empowerment, inclusive growth, poverty eradication, and high-quality education. The Budget prioritizes women, youth, farmers, and the middle class in order to ensure social fairness and encourage private sector investment and sustainable development. These steps have the potential to hasten India’s development into a highly competitive and economically resilient country if they are carried out successfully.

Frequently Asked Questions(FAQs)

  • What is the budget date for 2025?

    1 February 2025

  • Which sector will benefit from the budget in 2025?

    Following the Union Budget 2025, exciting prospects have surfaced in a number of areas. Real estate and renewable energy might profit from government measures, while the FMCG and consumer durables industries would benefit from the tax reduction announcement.

  • What is budget deficit 2025?

    The CBO projects a $1.9 trillion federal budget deficit in fiscal year 2025. When the consequences of changes in the timing of some payments are taken out of the equation, the deficit increases to $2.7 trillion by 2035.

  • What is Union Budget 2024-25?

    According to the minister, net tax revenues make up ₹25.57 lakh crore of the revised estimate of total collections other than borrowings, which is ₹31.47 lakh crore.

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