Union Budget 2025-26: India’s Roadmap for Growth & Development

  Sansad TV   Mar 7, 2025  Add to Reading List

The Union Budget for 2025-26, presented by the Finance Minister, lays out a comprehensive vision for economic development. It aims to propel India toward the goal of becoming a Viksit Bharat by focusing on key sectors like agriculture, Micro, Small and Medium Enterprises (MSMEs), investment, exports, taxation, and social welfare. Below is an overview of the four main pillars of development and other significant budgetary highlights.

Four Pillars for Development in Budget 2025-26

1. Agriculture: Empowering Farmers and Strengthening the Rural Economy

The government's agriculture-focused initiatives are designed to enhance productivity, improve food security, and promote sustainable farming practices:

  • Prime Minister Dhan-Dhaanya Krishi Yojana will expand to cover 100 districts, focusing on crop diversification, better irrigation infrastructure, and the creation of improved post-harvest storage facilities. This will elevate agricultural output, ensuring both food security and sustainability.
  • A six-year Aatmanirbharta Mission for Pulses aims to boost domestic production of key pulses like Tur, Urad, and Masoor dal, reducing reliance on imports and stabilizing domestic prices, which will ultimately help farmers' income levels.
  • The Kisan Credit Card (KCC) loan limit has been raised from ₹3 lakh to ₹5 lakh, under the Modified Interest Subvention Scheme, enhancing financial inclusion for farmers, fishermen, and dairy producers.
  • A new five-year Mission for Cotton Productivity will introduce scientific farming techniques, which will strengthen the cotton industry, benefiting the textile sector and improving export competitiveness.
  • India Post will transform into a logistics backbone for rural economies, connecting rural producers to national markets, reducing wastage, and improving the profitability of agricultural goods.

2. MSMEs: Driving Growth in Manufacturing and Employment

The budget focuses on supporting MSMEs by providing the necessary infrastructure, credit facilities, and market access to stimulate job creation and manufacturing growth:

  • The classification limit for MSMEs has been significantly increased—up to 2.5 times for investment and 2 times for turnover—facilitating more businesses to access government benefits.
  • A ₹1.5 lakh crore extension of the MSME Credit Guarantee Scheme over five years aims to improve liquidity and enable MSMEs to scale up innovation and infrastructure.
  • A new scheme will provide loans up to ₹2 crore for first-time SC/ST and women entrepreneurs, benefiting 5 lakh new business owners over the next five years.
  • The launch of a National Manufacturing Mission will support MSMEs in sectors like toy manufacturing and non-leather footwear, promoting exports and making India a global production hub.
  • Increased support for electronic equipment manufacturing will foster Industry 4.0 capabilities and strengthen India’s domestic industrial base, reducing reliance on imports.

3. Investment: Strengthening Infrastructure and Innovation

Investment in infrastructure, technology, and human capital forms the backbone of the Budget’s growth strategy:

  • A ₹1.5 lakh crore interest-free loan will be provided to states over 50 years to fund capital expenditure and reforms, driving economic growth and job creation.
  • The second Asset Monetization Plan (2025-30) is expected to raise ₹10 lakh crore to reinvest into new infrastructure projects, ensuring long-term sustainability.
  • Over the next five years, 50,000 Atal Tinkering Labs will be established in schools, promoting STEM education and innovation among the youth.
  • A dedicated ₹20,000 crore fund for Research, Development, and Innovation will boost private-sector-driven technological progress and enhance India’s competitiveness in emerging sectors.
  • The BharatNet Project aims to provide broadband connectivity to rural healthcare centers and government schools, bridging the rural-urban digital divide and improving services like e-governance and telemedicine.

4. Exports: Expanding Global Trade Horizons

To bolster India’s trade competitiveness and global presence, the government has proposed several export-oriented measures:

  • The Export Promotion Mission will offer MSMEs greater access to global markets, increasing India's share in international trade and enhancing foreign exchange reserves.
  • BharatTradeNet (BTN) will create a digital public infrastructure to streamline trade documentation and financing, improving efficiency and reducing costs.
  • Upgraded infrastructure for air cargo, especially perishable goods, will make Indian exports more competitive, particularly in the agricultural and industrial sectors.
  • Tier-2 cities will be developed as Global Capability Centres (GCCs) for IT and R&D, driving technology investment and creating high-skill jobs in emerging fields.
  • The government will further support domestic electronic equipment manufacturing, aligning it with global supply chains and increasing India’s export capacity.

Other Major Highlights of the Budget 2025-26

Gender Equality:

  • The gender budget allocation has risen by 37.25% to ₹4.49 lakh crore, now representing 8.86% of the total budget, focusing on welfare programs for women and girls.

Education:

  • The Ministry of Education receives a ₹1,28,650 crore allocation, a 6.22% increase over the previous year. Key initiatives include expanding broadband in rural schools, establishing more Atal Tinkering Labs, and enhancing IIT infrastructure.
  • An additional ₹500 crore has been earmarked for AI in education, and ₹20,000 crore will fund private-sector research and innovation.

Tax Reforms:

  • Income Tax Exemption: No tax will be levied on individuals earning up to ₹12 lakh annually, and salaried employees will benefit from a ₹12.75 lakh exemption due to standard deductions.
  • New tax slabs introduce rates ranging from 5% for incomes between ₹4 lakh to ₹8 lakh, with a 30% rate for incomes exceeding ₹24 lakh, simplifying compliance.
  • TDS exemptions for senior citizens have been increased, benefiting retirees and improving their financial security.
  • The Vivad Se Vishwas scheme has been extended to allow taxpayers up to four years to rectify returns, reducing disputes and boosting revenue collection.

Financial Sector Reforms:

  • FDI in insurance is set to increase from 74% to 100%, promoting greater foreign investment and bolstering the sector.
  • A High-Level Committee will review regulatory processes to improve business ease, and a new Investment Friendliness Index will drive competition among states for investment.
  • Infrastructure financing will be enhanced with the introduction of a Partial Credit Enhancement Facility, easing access to corporate debt markets.

Energy and Infrastructure:

  • ₹20,000 crore will be allocated for Small Modular Reactors (SMRs) as part of India’s clean energy transition, aiming for a 100 GW nuclear energy goal by 2047.
  • The Urban Challenge Fund of ₹1 lakh crore will improve city infrastructure, making urban centers globally competitive.
  • The Jal Jeevan Mission will extend until 2028 to ensure 100% tap water connectivity in rural areas, improving public health and living standards.

Defence, Cybersecurity, and Space Exploration:

  • Investments in defence manufacturing, cybersecurity, and space exploration will drive technological innovation, reduce reliance on imports, and position India as a global leader in critical sectors like satellite technology.

Special Provisions for Bihar:

  • A Makhana Board will support farmers with training and resources. Additionally, the establishment of a National Institute of Food Technology will boost agricultural processing and value addition, generating employment in Bihar.
  • Other key provisions include greenfield airports, enhanced Patna airport facilities, and financial backing for irrigation projects to assist farmers.

Conclusion:

The Union Budget 2025-26 is a transformative document, laying the foundation for sustained economic growth through strategic investments in agriculture, manufacturing, infrastructure, exports, and social welfare. The government's emphasis on inclusivity, innovation, and global competitiveness is set to propel India toward its goal of becoming a Viksit Bharat by 2047.