The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, introduced several key measures aimed at boosting the economy, supporting the middle class, and promoting sectors like agriculture, manufacturing, and tourism.
key highlights-
Tax Reforms:
1. No Income Tax up to ₹12 Lakh: Under the new tax regime, individuals earning up to ₹12 lakh annually will pay “zero income tax”. This is a significant relief for the middle class.
2. Revised Tax Slabs:
– ₹0–4 lakh: 0%
– ₹4–8 lakh: 5%
– ₹8–12 lakh: 10%
– ₹12–16 lakh: 15%
– ₹16–20 lakh: 20%
– ₹20–24 lakh: 25%
– Above ₹24 lakh: 30%
3. Section 87A Rebate: Increased from ₹7 lakh to ₹12 lakh, with a maximum rebate of ₹60,000.
4. Standard Deduction: Salaried individuals earning up to ₹12.75 lakh will pay “no tax” due to a ₹75,000 standard deduction.
Economic Growth and Capex
1. Capital Expenditure (Capex): Increased to ₹11.21 lakh crore for FY2025-26, up from ₹11.11 lakh crore in FY2024-25.
2. Fiscal Deficit: Estimated at 4.4% of GDP for FY2025-26.
3. Market Borrowings: Estimated at ₹11.53 lakh crore for FY2025-26.
–Sectoral Focus
1. Agriculture:
– Makhana Board: Established in Bihar to boost production, processing, and marketing of Makhana.
– Kisan Credit Card (KCC): Loan limit increased from ₹3 lakh to ₹5 lakh.
– Mission for “Aatma nirbharta” in Pulses: A 6-year mission to boost domestic production of Tur, Urad, and Masoor.
2. Manufacturing:
– Focus on Clean Tech Manufacturing (solar PV cells, EV batteries, wind turbines, etc.).
– Exemption of basic customs duty on Wet Blue Leather to boost domestic value addition.
3. Tourism:
– Development of top 50 tourist sites and skill development programs for youth.
– Introduction of e-visa facilities and MUDRA loans for homestays.
4. Nuclear Energy:
– Allocation of ₹20,000 crore for a Nuclear Energy Mission to develop Small Modular Reactors (SMRs) by 2033.
Employment and Welfare:
1. Job Creation: A new scheme aims to generate 22 lakh jobs, particularly in the footwear and leather sector.
2. Gig Workers: Included in welfare schemes, with identity cards and healthcare under PM Jan Arogya Yojana.
3. MSMEs:
– Investment and turnover limits increased by 2.5x and 2x, respectively.
– Customized Credit Card with a ₹5 lakh limit for micro-enterprises.
Healthcare and Lifesaving Drugs-
1. 36 Lifesaving Drugs: Exempted from basic customs duty to make them more affordable.
2. Senior Citizens: Exemptions on withdrawals from old National Savings Scheme (NSS) accounts.
Infrastructure and Connectivity-
1. UDAN Scheme: Modified version to enhance regional connectivity, targeting 120 new destinations and 4 crore passengers over 10 years.
2. Greenfield Airports: Proposed in Bihar to boost regional connectivity.
Other Key Announcements-
1. FDI in Insurance: Increased from 74% to 100% to attract foreign investment.
2. Defence Budget: Pegged at ₹4.91 lakh crore for FY2025-26.
3. Energy Allocation: Increased by 18% to ₹81,174 crore for FY2025-26.
4. IT and Telecome: Allocation reduced to ₹95,298 crore for FY2025-26.
Political and Social Focus-
1. Bihar: Received significant attention, with proposals like the Makhana Board and Greenfield Airports.
2. Youth and Skill Development: Emphasis on skill development programs and employment generation.
Conclusion-
The Union Budget 2025 focuses on “tax relief for the middle class”, “job creation”, “agricultural growth”, and “clean energy initiatives”. It also aims to boost sectors like tourism, manufacturing, and infrastructure while maintaining fiscal discipline. The budget has been termed a “dream budget” for the middle class due to its significant tax reforms and focus on disposable income.
