Key Highlights of Union Budget 2025-26: A Comprehensive Overview

Finance Minister Nirmala Sitharaman presented the Union Budget for 2025-26 on Saturday, detailing a slew of initiatives aimed at boosting various sectors of the Indian economy. The budget focuses on direct and indirect tax reforms, infrastructure development, agriculture, MSMEs, and more. Here are the key highlights from the budget:

Union Budget: Direct Tax Reforms

• Income Tax Relief: The budget introduced significant changes to the personal income tax structure under the new regime. Individuals earning up to Rs 12 lakh annually will no longer be required to pay income tax. For salaried individuals, the exemption limit will be raised to Rs 12.75 lakh, factoring in a standard deduction of Rs 75,000.
• Tax Forgone: The government will forgo approximately Rs 1 lakh crore in direct taxes.
• Simplified Tax System: A new Income-Tax Bill will be introduced to simplify the existing taxation system.

Indirect Tax Reforms

• Removal of Tariff Rates: Seven tariff rates have been removed, streamlining customs duties.
• Social Welfare Surcharge: The social welfare surcharge on 82 tariff lines subject to a cess has been exempted, providing relief to industries and businesses.

Insurance Sector Reforms

• FDI in Insurance: The government announced an increase in Foreign Direct Investment (FDI) in the insurance sector from 74% to 100%, which is expected to attract more global investments.

Government Receipts and Fiscal Deficit

• Total Receipts: The total government receipts, excluding borrowings, have been projected at Rs 34.96 lakh crore. Total expenditure is estimated at Rs 50.65 lakh crore.
• Fiscal Deficit: The fiscal deficit is estimated to be at 4.4% of GDP.
• Capex Expenditure: Rs 11.21 lakh crore (3.1% of GDP) will be allocated for capital expenditure.

Agriculture Sector Initiatives

• PM Dhan-Dhaanya Krishi Yojana: A new program in partnership with states will benefit 1.7 crore farmers, covering 100 districts.
• Mission for Aatmanirbharta in Pulses: A six-year mission will focus on the production of pulses like Tur, Urad, and Masoor.
• NAFED & NCCF Role: These organizations will procure pulses from farmers over the next four years to ensure fair prices and better market access.
• Makhana Board: A board will be set up in Bihar to improve the production, processing, and marketing of fox nuts (Makhana).

MSME Sector Boost

• Investment & Turnover Limits: The investment and turnover limits for classifying MSMEs will be increased by 2.5 times and 2 times, respectively.
• Credit Support: Customised credit cards will be issued with a Rs 5 lakh limit for micro-enterprises, with a plan to issue 10 lakh cards in the first year.
• Women, SC, and ST Entrepreneurs: A Rs 2 crore term loan scheme will be introduced for 5 lakh first-time women, SC, and ST entrepreneurs over the next five years.
• National Manufacturing Mission: A new mission will support small, medium, and large industries to further the “Make in India” vision.

Infrastructure and Education Development

• Atal Tinkering Labs: 50,000 Atal Tinkering Labs will be set up in government schools in the next five years to encourage innovation and research.
• Bharatnet Project: Broadband connectivity will be provided to all government secondary schools and primary health centers in rural areas.
• Medical Education: The budget proposes to add 10,000 new seats in medical colleges, contributing to a total of 75,000 new seats over the next five years.

Investment in New Sectors

• Artificial Intelligence: A Centre of Excellence in Artificial Intelligence will be set up for education, with a total outlay of Rs 500 crore.
• Regional Connectivity: The Modified UDAN scheme will enhance regional connectivity, targeting 120 new destinations and serving 4 crore passengers over the next decade.

Support for States and Infrastructure

• Interest-Free Loans: An interest-free loan package of Rs 1.5 lakh crore will be provided to states for capital expenditure, along with incentives for reforms.
• Asset Monetisation Plan: The government has unveiled a second asset monetisation plan (2025-30) to raise Rs 10 lakh crore for new infrastructure projects.

Nuclear Energy Mission

• Small Modular Reactors (SMRs): A dedicated research and development mission will be set up for Small Modular Reactors (SMRs) with a total outlay of Rs 20,000 crore. The goal is to have 5 indigenously developed SMRs operational by 2033.

Other Notable Announcements

• SWAMIH Fund 2: A Rs 15,000 crore fund will be used for the completion of 1 lakh housing units, focusing on urban infrastructure.
• BharatTradeNet (BTN): A new unified platform will be launched for international trade documentation and financing solutions.

The Union Budget 2025-26 focuses on a balanced approach to economic growth, infrastructure development, tax reforms, and social welfare, marking a transformative year for India’s economic landscape.