Union Budget 2025-26

Union Budget 2025-26

Union Budget 2025-26: Accelerating Growth Towards Viksit Bharat
The Union Budget for the financial year 2025-26 was presented in Parliament by the Union Finance Minister, outlining a strategic roadmap for economic development under the overarching theme of Sabka Vikas (Development for All).

This budget emphasizes balanced growth, fostering economic resilience, and enhancing social welfare while recognizing four key pillars driving India's progress: Agriculture, Micro, Small and Medium Enterprises (MSMEs), Investment, and Exports.

The Four Engines of Development
1. Agriculture: Strengthening Rural Prosperity
To boost agricultural productivity and rural prosperity, the government has introduced several initiatives:

• Prime Minister Dhan-Dhaanya Krishi Yojana: Targeting 100 districts with low agricultural productivity, benefiting 1.7 crore farmers by improving irrigation, post-harvest storage, and modern farming techniques.
• Rural Prosperity and Resilience Program: Implemented in collaboration with states to reduce underemployment through skilling, investments, and technology integration.
• Self-Reliance in Pulses: A six-year mission focusing on climate-resilient Tur, Urad, and Masoor crops, supported by procurement mechanisms through NAFED and NCCF for four years.
• Enhanced Kisan Credit Card (KCC) Limit: Increased from ₹3 lakh to ₹5 lakh, facilitating greater credit access for 7.7 crore farmers.
• National Mission on High-Yielding Seeds: Strengthening agricultural research to provide over 100 high-yielding, pest-resistant seed varieties.
• Cotton Productivity Mission: A five-year program to boost sustainable farming and improve the quality of extra-long staple cotton.
• Makhana Board in Bihar: A dedicated board to promote production, processing, and value addition of Makhana.
• Fruits and Vegetables Program: Strengthening supply chains for better market access and farmer profitability.
• Fisheries Development: Introducing a new sustainable fishing framework focusing on Exclusive Economic Zones, Andaman & Nicobar, and Lakshadweep.
• New Urea Plant in Assam: A 12.7 lakh metric ton capacity facility at Brahmaputra Valley Fertilizer Corporation Ltd (BVFCL) to enhance agricultural productivity.

Recognizing the role of MSMEs as the backbone of the economy, the government has proposed several support measures:

• Revised MSME Classification: Investment and turnover limits increased by 2.5 times to enhance credit availability.
• Micro Enterprise Credit Cards: ₹5 lakh credit facility extended to 10 lakh micro enterprises, promoting financial inclusion and business expansion.
• Enhanced Credit Guarantee Cover: Increased from ₹5 crore to ₹10 crore, easing access to higher loan amounts.
• Focus Product Scheme for Leather and Footwear: Aiming for ₹4 lakh crore turnover and generating 22 lakh jobs, with projected exports exceeding ₹1.1 lakh crore.
• Toy Manufacturing Boost: Establishing innovation-driven clusters to position 'Made in India' toys in global markets.
• National Institute of Food Technology: A new institute in Bihar to drive food processing, skilling, and entrepreneurship.
• Fund of Funds for Startups: Additional ₹10,000 crore allocated to support high-potential startups and innovation.

3. Investment: Strengthening Infrastructure and Research

The budget underscores investment-led growth through various infrastructure, research, and urban development initiatives:

• Urban Challenge Fund: ₹1 lakh crore allocated to enhance city growth hubs, sanitation, and creative urban redevelopment, with ₹10,000 crore set aside for FY 2025-26.
• Jal Jeevan Mission: With an increased budget of ₹67,000 crore, extended until 2028 to ensure universal piped water supply, benefiting 15 crore rural households.
• Maritime Development Fund: ₹25,000 crore to support shipbuilding, port expansion, and logistics infrastructure.
• Expansion of IITs: Increased capacity for 6,500 additional students to strengthen technical education.
• PM Research Fellowship: 10,000 new fellowships for advanced research in IITs and IISc.
• District-Level Cancer Centers: Establishing 200 cancer treatment centers in 2025-26, with a plan to cover all districts within three years.
• Bharatiya Bhasha Pustak Scheme: Digital books in Indian languages to promote accessibility in education.
• Nuclear Energy Mission: A ₹20,000 crore outlay for Small Modular Reactors (SMRs), targeting five operational SMRs by 2033.
• Regional Connectivity under UDAN: Expansion to 120 new destinations with a goal of carrying 4 crore passengers over the next decade.
• Greenfield Airport in Bihar: New airport development and expansion of Patna airport, along with a brownfield airport at Bihta.
• Western Koshi Canal ERM Project: Financial support for irrigation infrastructure in Bihar.
• Tourism Growth Initiative: Development of the top 50 tourist destinations in collaboration with states.

4. Export Promotion: Expanding Global Trade

To enhance India's global trade competitiveness, the government has announced the following measures:

• Export Promotion Mission: Establishing sector-specific targets in collaboration with the Ministries of Commerce, MSME, and Finance.
• BharatTradeNet (BTN): A unified digital platform streamlining international trade documentation and financing.
• National Framework for GCCs: Providing policy incentives to promote outsourcing hubs in Tier-2 cities.
• Air Cargo Warehousing: Development of modern storage infrastructure for high-value perishable exports.

Key Highlights in Taxation and Financial Reforms

• New Income Tax Slabs:
  • No tax for annual income up to ₹12 lakh (₹12.75 lakh for salaried taxpayers with deductions).
  • Revised slab structure ensuring progressive taxation.
• TDS Reforms: Threshold for tax deduction on rent increased from ₹2.4 lakh to ₹6 lakh.
• Extended Tax Filing Window: Updated returns can now be filed within four years, promoting voluntary compliance.
• Customs Duty Exemptions:
  • 36 life-saving drugs, including those for cancer and rare diseases, fully exempted.
  • Exemptions on lithium-ion battery manufacturing to boost the EV sector.
  • Textile and electronics sector incentives to enhance domestic manufacturing.

Social Welfare and Financial Inclusion

• PM SVANidhi Scheme: UPI-linked credit cards with a ₹30,000 limit for street vendors.
• Gig Worker Benefits: Registration on the e-Shram portal ensuring social security and health benefits.
• Atal Tinkering Labs: Establishing 50,000 labs in government schools over five years to foster innovation.
• Medical Education Expansion: Addition of 10,000 medical seats, targeting 75,000 new seats within five years.

Financial and Investment Reforms

• Grameen Credit Score: Enhancing access to formal credit for rural borrowers.
• SWAMIH Fund 2.0: ₹15,000 crore allocated to complete 1 lakh housing units.
• Increased FDI in Insurance: Raising the cap from 74% to 100% for companies investing premiums within India.
• State Investment Friendliness Index: A ranking framework to encourage cooperative federalism.
• Partial Credit Enhancement Facility: Supporting corporate bonds for infrastructure financing.
• Regulatory Reforms Committee: Reviewing and simplifying non-financial sector regulations.

Key Takeaways
The Union Budget 2025-26 establishes a strong foundation for Viksit Bharat by prioritizing inclusive growth, economic empowerment, and private sector participation. With a clear focus on improving agriculture, strengthening MSMEs, driving investment, and expanding exports, this budget is poised to accelerate India's transformation into a globally competitive and resilient economy.

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