The Union Budget 2025 has charted an ambitious course for India’s transformation into a developed nation by 2047
On February 1, 2025, Union Finance Minister Nirmala Sitharaman unveiled her record eighth union budget in the Parliament, setting a progressive roadmap for India’s transformation into ‘Viksit Bharat’ by 2047. This budget, which encompasses a comprehensive strategy with a focus on agriculture, MSME, investment, and exports, will significantly stimulate economic growth while addressing both immediate and long-term challenges.
The Union Budget 2025-26 has reposed faith in the middle class and continued the trend of giving relief in tax burden to the common tax–payer. The budget announcement brought a series of key announcements for the nation’s middle class. One of the most discussed developments among the budget announcements has been no income tax up to Rs 12 lakh.
The increase in the personal tax rebate limit – will lead to a rise in national consumption and stimulate economic growth. Along with this, the changes proposed across indirect taxes are focussed on providing impetus to domestic manufacturing. Overall, Budget 2025 has laid out a clear roadmap for ‘Viksit Bharat.’
The announcement of a new fund for startups, increased investment to promote innovation in partnership with the private sector, and the launch of programmes to boost manufacturing and exports have struck the right notes for India Inc.
India’s real GDP is projected to expand by 6.4% in FY25, marking the third consecutive year of growth exceeding 6%. This steady momentum is driven by a robust services sector, increasing investments, and rising rural demand.
The Union Budget 2025-2026 promises to continue government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance spending power of India’s rising middle class. The Budget proposes development measures focusing on poor, Youth, farmer and women.
The Budget aims to initiate transformative reforms in taxation, power sector, urban development, mining, financial sector, and regulatory reforms to augment India’s growth potential and global competitiveness. Union budget highlights that agriculture, MSME, investment, and exports are engines in the journey to Viksit Bharat using reforms as fuel, guided by the spirit of inclusivity.
A comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme will be launched in partnership with states to address underemployment in agriculture through skilling, investment, technology, and invigorating the rural economy. The goal is to generate ample opportunities in rural areas, with focus on rural women, young farmers, rural youth, marginal and small farmers, and landless families.
The Budget has outlined measures to comprehensive programme for vegetables & fruits, national mission on high yielding seeds, and a five year Mission for cotton productivity amongst other measures to promote agriculture and allied activities in a major way.
The Union Finance Minister described MSMEs as the second power engine for development as they constitute for 45% of our exports. To help MSMEs achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs enhanced to 2.5 and 2 times, respectively. Further, steps to enhance credit availability with guarantee cover have also been announced.
During the budget speech she also announced the launch of a new scheme for 5 lakh women, scheduled castes and scheduled tribes first-time entrepreneurs. This will provide term loans up to Rs. 2 crore during the next 5 years.
Defining Investment as the third engine of growth, she prioritized investment in people, economy and innovation. Under the investment in people, she announced that 50,000 Atal Tinkering Labs will be set up in government schools in next 5 years.
The introduction of the Export Promotion Mission is a step towards making Indian exports globally competitive. By bringing together the ministries of Commerce, MSME, and Finance under one umbrella, the mission will ensure a coordinated approach to policymaking and implementation. This integrated effort will help exporters navigate international trade complexities with greater ease, support small and medium players in tackling non-tariff measures, and provide the necessary financial and regulatory support to expand their global footprint.
The establishment of Bharat Trade Net (BTN) – a digital public infrastructure for international trade – is a welcome step. This unified platform will streamline trade documentation and financing needs, aligning India’s trade processes with global practices. It will substantially reduce transaction costs, improve efficiency, and bring down the cost and time of doing business.
Union finance minister mentioned that support will be provided to develop domestic manufacturing capacities for our economy’s integration with global supply chains. She also announced that government will support the domestic electronic equipment industry for leveraging the opportunities related to Industry 4.0. A National Framework has also been proposed for promoting Global Capability Centres in emerging tier 2 cities.
Reiterating the commitment to stay the course for fiscal consolidation, union finance minister stated that the government endeavours to keep the fiscal deficit each year such that the central government debt remains on a declining path as a percentage of the GDP and the detailed roadmap for the next 6 years has been detailed in the FRBM statement.
As India navigates global uncertainties, this budget positions the country as a potential leader, signalling to investors that it prioritises stability, sustainability, and inclusive growth. The initiatives outlined in this budget are strategic actions that can galvanise India’s economy, creating a more equitable society and a vibrant marketplace for generations to come.
The Union Budget 2025 has charted an ambitious course for India’s transformation into a developed nation by 2047. With a strong focus on boosting private investment, increasing funding in the agriculture sector, and enhancing the spending power of the people, the government has clearly indicated its commitment to an inclusive path to economic development.
In conclusion, the Budget 2025 is anticipated to bring about significant shifts in market dynamics, with consumption-driven sectors emerging as potential winners, while industries dependent on capital expenditure may face short-term challenges.
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