Union Budget highlighted that Agriculture, MSME, Investment, and Exports are engines in the journey to Viksit Bharat.
1. Agriculture:
- ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states covering 100 districts to increase productivity, adopt crop diversification, augment post-harvest storage, improve irrigation facilities, and facilitate availability of long-term and short-term credit.
- Mission for Aatmanirbharta (self-reliance) in Pulses:
- A 6-year “Mission for Aatmanirbharta in Pulses” with special focus on Tur, Urad and Masoor.
- Central agencies (NAFED and NCCF) will be ready to procure these 3 pulses, as much as offered during the next 4 years from farmers.
- The budget has allocated Rs 1,000 crore towards this scheme, which aims to provide Minimum Support Price (MSP) based procurement and post-harvest warehousing solutions in respect of the three pulses crops.
- National Cotton Technology Mission:
- To address the challenges of stagnant cotton productivity, the budget has announced a five year Cotton Mission to increase cotton productivity especially extra-long staple varieties. The budget has allocated Rs 500 crore towards this scheme.
- Science & Technology support will be provided to farmers under this Mission.
- The scheme will ensure steady supply of quality cotton to the Indian textile sector and is aligned with the government’s integrated 5F vision for the textile sector: Farm to fibre; fibre to factory; factory to fashion; fashion to foreign.
- National Mission on High Yielding Seeds:
- The National Mission on High Yielding Seeds will be launched.
- Aim: To improve research, seed quality, ensure high yields, pest resistance, and climate resilience, and make more than 100 seed varieties (23 varieties of cereals, 11 pulses, seven oilseeds, among others) commercially available.
- Fox seed (Makhana) Development:
- A makhana board will be established in Bihar to improve the production, processing, value addition and marketing of makhana (foxnut).
- With an allocation of Rs 100 crore for FY 2025-26, the board will provide training and support to makhana farmers, who will be organised into farmer producer organisations (FPO).
- Enhancing Loan limits for Farmers: The loan limit under the Modified Interest Subvention Scheme (MISS) will be enhanced from ₹3 lakh to ₹5 lakh, for loans taken through Kisan Credit Cards that facilitate short-term loans for 7.7 crore farmers, fishermen, and dairy farmers.
2. Industries:
- Revised definition of MSMEs to enable more firms to achieve higher efficiencies of scale, technological upgradation and better access to capital.
- National Manufacturing Mission:
- Covering small, medium and large industries for furthering “Make in India”.
- The Mission will lay emphasis on five focal areas i.e. ease and cost of doing business; future ready workforce for in-demand jobs; a vibrant and dynamic MSME sector; availability of technology; and quality products.
- The Mission will also support Clean Tech manufacturing and aims to improve domestic value addition and build the ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid scale batteries.
- Focus Product Scheme for footwear and leather sectors to enhance productivity, quality and competitiveness of these sectors.
- The scheme will support design capacity, component manufacturing, and machinery requirement for production of non-leather footwear and leather footwear and other products.
- It is expected to generate a turnover of ₹4 lakh crore and export of more than ₹1.1 lakh core, generating employment for 22 lakh people.
- Scheme to make India a global hub of toys: The scheme will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality and sustainable toys that will represent the 'Made in India' brand.
3. Investment:
The budget prioritised investment in people, economy and innovation.
- Investment in people:
- 50,000 Atal Tinkering Labs will be set up in Government schools in next 5 years.
- Broadband connectivity will be provided to all Government secondary schools and primary health centres in rural areas under the Bharatnet project.
- A Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of 500 crore.
- Identity cards will be issued to Gig workers and their registration on the e-Shram portal and healthcare under PM Jan Arogya Yojana will be facilitated.
- PM SVANidhi scheme will be revamped with enhanced loans from banks, UPI linked credit cards with ₹30,000 limit, and capacity building support.
- Investment in Economy:
- An outlay of Rs 1.5 lakh crore was proposed for the 50-year interest free loans to states for capital expenditure and incentives for reforms.
- Second Asset Monetisation Plan 2025-30 was announced to mobilize capital of Rs 10 lakh crore in new projects.
- Jal Jeevan Mission was extended till 2028 with focus on the quality of infrastructure and Operation & Maintenance of rural piped water supply schemes through “Jan Bhagidhari”.
- Urban Challenge Fund:
- To ramp up urban infrastructure, the government would set up an Urban Challenge Fund of ₹1 lakh crore to finance up to 25 per cent of bankable projects in urban infrastructure.
- The condition to avail this support is that at least 50% of the cost is funded through bonds, bank loans and PPPs.
- An allocation of ₹10,000 crore is proposed in 2025-2026 for this.
- Investment in Innovation:
- An allocation of ₹20,000 crore is announced to implement a private sector driven Research, Development and Innovation initiative.
- National Geospatial Mission (NGM):
- An initiative to strengthen the country’s geospatial infrastructure, ensuring the availability of accurate and real-time geospatial data for various sectors.
- This mission aims to boost economic growth, support governance, and enhance national security by leveraging geospatial technologies.
- Gyan Bharatam Mission:
- A mission for undertaking the “survey, documentation and conservation” of India’s manuscript heritage lying with academic institutions, museums, libraries, and private collectors.
- To accommodate this new initiative, the budget allocation for the National Manuscripts Mission (NMM) has been hiked from ₹3.5 crore to ₹60 crore.
| Purvodaya Plan: ‘Purvodaya’, for the all-round development of five states in the eastern region, including Bihar, Odisha, Jharkhand, West Bengal and Andhra Pradesh.The plan will cover human resource development, infrastructure, and generation of economic opportunities in the eastern region of the country. |
4. Exports:
- Exports Promotion Mission:
- Government to set up an Export Promotion Mission with an outlay of ₹2,250 crore.
- It will facilitate easy access to export credit, cross-border factoring support, and help MSMEs tackle non-tariff measures in overseas markets.
- This mission will be driven jointly by the Ministries of Commerce, MSMEs, and Finance.
5. Fiscal Consolidation:
- The Central Government debt remains on a declining path as a percentage of the GDP. The Revised Estimate 2024-25 of the fiscal deficit is 4.8 per cent of GDP, while the Budget Estimates 2025-26 is estimated to be 4.4 per cent of GDP.
6. Contribution of Major tax components to the total gross tax revenues of the Union Govt:
| Tax | Revised Estimates (2024-25) | Budget Estimates (2025-26) |
| Corporation Tax | 25.45% | 25.37% |
| Income Tax | 32.64% | 33.73% |
| Customs | 6.09% | 5.63% |
| Union Excise Duties | 8.05% | 7.55% |
| Goods and Services Tax (GST) | 27.55% | 27.59% |
Indirect Taxes
- Rationalising Customs Tariffs:
- Reduced the total number of customs tariffs to only eight tariff rates including ‘zero’ rate for industrial goods.
- Apply appropriate cess to ensure that the overall tax burden (effective duty incidence) on industrial goods remains broadly unchanged.
- Proposed to not levy not more than one cess or surcharge on industrial goods. Hence, social welfare surcharge has been exempted on 82 tariff lines that are subject to cess.
- Sector Specific Proposals:
| Sector | Proposal |
| Drugs/Medicines | Exempted Basic Customs Duty (BCD) on 36 lifesaving drugs. |
| Critical Minerals | Exempted Basic Customs Duty on critical minerals like cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc etc. This is in addition to the 25 critical minerals fully exempted from BCD in the July 2024 Budget. |
| Textiles | To boost domestic production of technical textiles like agro-textiles, medical textiles, and geo-textiles, the Budget Customs Duty (BCD) on two types of shuttle less looms for the textile industry has been reduced to nil from 7.5%. This move will lower the cost of high-quality imported looms, enabling modernisation and capacity expansion in the weaving sector, and strengthening the Make in India initiative in the technical textiles industry. |
| Electronic goods | Rectified inverted duty structure on a few electronic goods by increasing the BCD on Interactive Flat Panel Display (IFPD) from 10% to 20% and reducing the BCD to 5% on Open Cell and other components. |
Direct Taxes
Personal Income Tax Reforms:
- Under the new tax regime, no income tax payable up to income of ₹12 lakh.
- Slabs and rates have been changed across the board to benefit all taxpayers to reduce the tax burden of the middle class and leave more money in their hands, boosting household consumption, savings, and investment.
- Tax slabs and the respective rates under new tax regime:
Ease of Doing Business:
- To simplify transfer pricing and reduce annual scrutiny, the budget introduced a scheme to determine the arm's length price of international transactions for a three-year block period, aligning with global best practices.
- With a view to reduce litigation and provide certainty in international taxation, the scope of safe harbour rules is being expanded.