Jammu, Feb 01: Finance Minister Nirmala Sitharaman today presented the Union Budget for 2025-26, outlining key measures aimed at accelerating India’s economic growth, stimulating private sector investments, and uplifting the middle class. This marks her eighth consecutive budget presentation, as she approaches the record held by former Prime Minister Morarji Desai for presenting ten budgets.
In her speech, Sitharaman emphasized the government’s commitment to overcoming global economic challenges while fostering robust growth within India. She expressed confidence in the country’s ability to remain a leader among the world’s fastest-growing economies.
Sitharaman laid out a vision for a “Viksit Bharat” (Developed India), focusing on sustainable and inclusive growth. “India’s economy continues to grow at the fastest pace among major global economies,” she said, reflecting on the country’s progress over the last decade and the structural reforms that have enhanced India’s global standing. She stressed that the next five years present a unique opportunity to realize ‘Sabka Vikas’ (Development for All), ensuring balanced growth across all regions.
A major highlight of the budget is the significant relief for middle-class taxpayers. Under the new tax regime, individuals earning up to ₹12 lakh annually will be exempt from income tax. This move is expected to provide considerable tax relief to over 85% of the country’s personal income taxpayers. Additionally, salaried individuals earning up to ₹12.75 lakh will benefit from this exemption, factoring in the standard deduction.
The budget also proposes a rationalization of the TDS/TCS system, including an increase in the TDS limit for senior citizens on interest income from ₹50,000 to ₹1 lakh, and raising the threshold for rent payments from ₹2.4 lakh to ₹6 lakh. The Liberalized Remittance Scheme (LRS) was also updated, with the TCS threshold raised from ₹7 lakh to ₹10 lakh. Education-related remittances funded by loans from specified financial institutions will now be exempt from TCS.
In one of the most significant proposals, Sitharaman announced a complete overhaul of the Income Tax Act. The current law, which dates back six decades, will be replaced with a simpler, more transparent system aimed at improving tax compliance and reducing litigation. The time limit for filing updated tax returns has also been extended from two years to four years, allowing taxpayers more time to correct omissions in their declarations.
For the financial year 2025-26, the government has projected a fiscal deficit of 4.8% of GDP, with a target of 4.4% for FY26. The total expenditure for the fiscal year has been set at ₹50.65 lakh crore, reflecting a 7.4% increase from the previous year. Capital expenditure is pegged at ₹11.22 lakh crore, with an effective capital expenditure of ₹15.48 lakh crore, emphasizing the government’s focus on infrastructure and long-term growth.
A notable boost in the budget is the allocation for centrally sponsored schemes, which will receive ₹5.42 lakh crore, up from ₹4.15 lakh crore last year. This increase is partly due to higher defense and employment generation needs. The total resources for state devolution, grants, and centrally sponsored schemes have also risen to ₹25.01 lakh crore for FY25-26.
On the infrastructure front, Sitharaman proposed measures to support the technology and manufacturing sectors, particularly in the fields of mobile phone and electric vehicle (EV) battery production. The budget includes plans to add 28 capital goods for mobile phone battery production and 35 for EV battery manufacturing to the exempted list, aiming to strengthen domestic production of lithium-ion batteries. Additionally, the government proposed cuts in customs duties for components used in the manufacturing of smartphones, TVs, and other electronic devices, potentially making these products more affordable for consumers.
The budget places heavy emphasis on four key sectors to drive India’s economic growth: agriculture, MSMEs, investment, and exports. These sectors, Sitharaman stated, are essential to achieving the government’s vision of a developed India. The budget also proposes reforms across various domains, including taxation, power, urban development, mining, financial systems, and regulatory frameworks, all aimed at enhancing India’s competitiveness on the global stage.
By focusing on long-term economic reforms, infrastructure development, and inclusive growth, this budget seeks to lay the foundation for a resilient, globally competitive economy that will lead India toward its goal of becoming a Viksit Bharat.
The budget’s proposed allocation reflects a strong focus on addressing critical sectors, with increased spending on infrastructure, defense, and employment generation schemes to ensure a more resilient and competitive economy for India in the coming years.
Budget 2025-26 Key Figures:
• Total Expenditure: ₹50.65 lakh crore, a 7.4% increase from FY24.
• Centrally Sponsored Schemes: ₹5.42 lakh crore, up from ₹4.15 lakh crore in FY24.
• Capital Expenditure: ₹11.22 lakh crore, with effective capital expenditure of ₹15.48 lakh crore.
• Fiscal Deficit: Projected at 4.8% of GDP for FY25, with a target of 4.4% for FY26.
• Resources for State Devolution & Grants: ₹25.01 lakh crore, up ₹4.91 lakh crore from last year.
