The Indian Union Budget 2025-26 has been presented by Finance Minister Nirmala Sitharaman on February 1, 2025. The budget is a crucial document that outlines the financial and economic agenda for the nation in the upcoming fiscal year. This budget aims to address a wide range of sectors, from agriculture to infrastructure, while promoting economic growth and stability.

The government’s key priorities for the year are to boost economic recovery, increase agricultural productivity, enhance connectivity, and promote the MSME sector. The Union Budget 2025 also focuses on tax reforms and improving the overall ease of doing business in India.

Fiscal Deficit and Debt Targets

The fiscal deficit target for the year is set at 4.8% of GDP. The government also aims to bring this down to 4.4% in the following year. This is part of a plan to reduce the country’s fiscal deficit over time, ensuring fiscal discipline while still focusing on growth.

The finance minister highlighted the importance of sustaining public investments and said that the government will continue to focus on boosting public capital expenditure in infrastructure and social sectors.

Income Tax and Customs Reforms

A major focus of the budget is personal income tax reforms. The government has proposed a new income tax bill, which aims to simplify the tax structure and enhance compliance. This initiative is seen as a step to make the tax system more efficient and transparent.

In addition to this, the finance minister also proposed a reduction in customs duties on essential items. For instance, 36 life-saving drugs for the treatment of cancer and rare diseases will be exempt from customs duties, making them more affordable for the general public.

Agriculture and Rural Development

Agriculture plays a vital role in India’s economy, and the budget includes several measures to support this sector. A new initiative called the Dhan Dhaniya Krishi Yojna has been introduced. This scheme will target 100 districts with low agricultural productivity. It is expected to benefit around 1.7 crore farmers and promote rural prosperity.

Additionally, the Kisan Credit Card (KCC) scheme has been revamped. The credit limit for KCC holders will be increased from Rs.3 lakh to Rs.5 lakh, providing farmers with easier access to credit for their farming activities. This is a positive move that will likely have a long-term impact on improving rural incomes.

Infrastructure and Connectivity

The Indian government has made infrastructure development a top priority. The finance minister announced an expansion of the UDAN scheme, which aims to improve air connectivity in the country. The government will add 120 new destinations under this scheme, which will help in accommodating an additional 4 crore passengers in the coming years.

One of the standout initiatives in the budget is the plan to develop a nuclear energy mission. The government intends to create a framework to generate 100 GW of nuclear energy by 2047. This will be backed by necessary amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, which will facilitate private sector participation in the sector.

Support for MSMEs and Women Entrepreneurs

The budget also places significant emphasis on Micro, Small, and Medium Enterprises (MSMEs). The finance minister proposed an enhanced credit facility for MSMEs, increasing the credit coverage to ₹10 crore. This move is expected to provide a boost to the sector, enabling MSMEs to expand and become more competitive in the market.

For women entrepreneurs, the budget introduces a new scheme aimed at promoting entrepreneurship and financial inclusion. A fund of ₹5 lakh will be allocated to support women, Scheduled Castes (SC), and Scheduled Tribes (ST) in starting their businesses. This initiative is expected to promote inclusivity and empower these communities.

Nuclear Power and Sustainable Energy

The budget has also outlined ambitious goals for nuclear energy. A 100 GW nuclear power mission will be launched by 2047 to ensure the country’s energy security. This will be made possible through reforms in the legal framework surrounding nuclear energy and liabilities associated with its usage.

The government plans to attract private investments into this sector and increase nuclear energy generation, helping India move towards a cleaner and more sustainable energy future.

Education and Skill Development

Education has also been a key focus in the 2025 budget. The government will enhance its investment in skill development programs, particularly for the youth. This will be aimed at improving employability and ensuring that India’s workforce is equipped to meet the demands of the future.

The National Skill Development Mission will be strengthened, with new initiatives to promote vocational training. There will also be more focus on digital literacy and enhancing skills in emerging sectors like artificial intelligence (AI) and machine learning (ML).

Support for Healthcare and Innovation

The government has proposed reforms in the healthcare sector, with a strong focus on affordable healthcare. The reduction in customs duties on essential medicines is one of the major steps taken in this direction.

The budget also highlights innovation and technology as vital areas for growth. The government is committed to fostering research and development (R&D), especially in fields like biotechnology, pharmaceuticals, and information technology. Support for startups will continue to be a priority, as these businesses play a key role in driving economic growth and job creation.

Foreign Investments and Insurance Reforms

The foreign direct investment (FDI) policy in the insurance sector has also been reformed. The limit for FDI in this sector will be increased to 100%, making it more attractive for international investors to enter India’s rapidly growing insurance market.

The move is expected to bring in foreign capital, along with the expertise necessary to develop new financial products and services tailored to the needs of the Indian market.

The Union Budget 2025-26 is a comprehensive plan aimed at steering India towards sustainable and inclusive growth. The government has focused on enhancing productivity in key sectors such as agriculture, infrastructure, and MSMEs while introducing several tax reforms and fiscal measures to promote economic stability.

The budget’s focus on infrastructure development, agriculture, MSMEs, and nuclear energy represents a forward-thinking approach to India’s economic growth. The proposals for women empowerment, tax simplification, and healthcare reform are designed to ensure that the benefits of growth are felt across all sections of society.

As the country moves forward into 2025, the Union Budget 2025 sets a positive tone for the future of the Indian economy, highlighting a path to sustained growth and a stronger, more inclusive India.