Union Budget 2025-26: Key Announcements, Tax Reforms, and Growth Roadmap for Viksit Bharat

Budget Theme & Vision

• The budget focuses on accelerating growth, inclusive development, private sector investments, and strengthening the middle class.
• The overarching goal is to achieve “Viksit Bharat” (Developed India) with zero poverty, quality education, affordable healthcare, skilled employment, and women empowerment.
• The government emphasizes four economic engines:
  1. Agriculture
  2. MSMEs
  3. Investment
  4. Exports
• Reforms in taxation, power sector, urban development, mining, financial sector, and regulatory framework will drive growth.

Key Proposals & Changes

1. Agriculture & Rural Development

• “PM Dhan-Dhaanya Krishi Yojana”: Focus on 100 underdeveloped agricultural districts to improve productivity and credit availability.
• Mission for Aatmanirbharta in Pulses: A 6-year plan focusing on Tur, Urad, and Masoor pulses.
• National Mission on High-Yielding Seeds: Aims at pest-resistant and climate-resilient crops.
• Makhana Board in Bihar: To boost Makhana production and processing.
• Enhanced Kisan Credit Card (KCC) Loans: Limit increased from ₹3 lakh to ₹5 lakh.

2. MSME Growth & Entrepreneurship

• New MSME Classification: Investment and turnover limits increased by 2.5 times.
• Credit Guarantee Enhancements:
  • Micro & Small Enterprises: From ₹5 crore to ₹10 crore.
  • Startups: From ₹10 crore to ₹20 crore.
• Micro Enterprises Credit Cards: ₹5 lakh limit for MSMEs.
• Support for First-time Entrepreneurs: ₹2 crore loan scheme for 5 lakh women, SC, and ST entrepreneurs.
• Support for Labour-Intensive Sectors:
  • Footwear & Leather: Scheme expected to generate 22 lakh jobs.
  • Toy Sector: Plans to make India a global toy hub.

3. Investment in Infrastructure & Development

• 50,000 Atal Tinkering Labs in government schools.
• Expansion of Medical Education: 10,000 additional medical seats in 2025-26.
• PM SVANidhi Scheme: UPI-linked credit cards for street vendors with a ₹30,000 limit.
• Gig Workers Welfare Scheme: 1 crore workers to receive healthcare under PM Jan Arogya Yojana.
• UDAN Scheme Expansion: 120 new regional destinations to be connected.

4. Exports & Manufacturing

• Export Promotion Mission: Streamlining export financing and regulatory support.
• “BharatTradeNet”: A unified digital trade platform.
• Green Manufacturing Support: Solar PV cells, EV batteries, wind turbines, etc.
• Shipbuilding Clusters & Maritime Development Fund: ₹25,000 crore corpus for port and shipbuilding development.

5. Energy & Power Reforms

• Nuclear Energy Mission: ₹20,000 crore fund for developing Small Modular Reactors (SMRs).
• Renewable Energy Expansion: Incentives for solar, wind, and green hydrogen projects.
• Urban Challenge Fund: ₹1 lakh crore for smart cities, sanitation, and urban infrastructure.

Taxation Reforms

1. Direct Tax Changes (Income Tax)

• New Income Tax Slabs:
  • Income up to ₹12 lakh: No tax
  • ₹12.75 lakh for salaried individuals (due to ₹75,000 standard deduction).
  • New tax rates:
    • ₹4-8 lakh: 5%
    • ₹8-12 lakh: 10%
    • ₹12-16 lakh: 15%
    • ₹16-20 lakh: 20%
    • ₹20-24 lakh: 25%
    • ₹24 lakh and above: 30%
• Higher TDS thresholds for interest, rent, and foreign remittances.
• Startups Tax Benefits: Incorporation window extended to 2030.

2. Indirect Tax Changes (Customs & GST)

• Duty reductions:
  • Essential medicines, critical minerals, lithium-ion batteries, textiles, and electronics.
  • Fish and marine products duty reduced from 30% to 5%.
• Duty increases:
  • Interactive Flat Panel Display units: Raised from 10% to 20%.
  • Luxury motorcycles & cars: Higher customs duties.
• New tax exemptions:
  • Shipbuilding materials, solar PV components, and AI-driven smart meters.

Fiscal Policy & Budget Estimates

• Fiscal deficit targeted at 4.4% of GDP for 2025-26.
• Market borrowings estimated at ₹11.54 lakh crore.
• Total expenditure: ₹50.65 lakh crore (including ₹10.18 lakh crore in capital expenditure).

Conclusion

• The budget focuses on long-term economic growth, middle-class empowerment, rural development, and industry-led transformation.
• Reforms in taxation, infrastructure, agriculture, and MSMEs will play a crucial role in India’s economic trajectory.

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