The Union Budget 2025-26 outlines the financial roadmap for the upcoming fiscal year. The key focus areas include infrastructure development, social welfare, economic growth, and fiscal consolidation. One of the standout features of this budget is the substantial relief provided to the middle class. By raising the income tax exemption threshold to Rs 12 lakh, the government has put more money in the hands of the average citizen, driving consumption, savings, and investment. Tax relief is expected for around 6.3 crore taxpayers, the majority being middle-class individuals. The corporate tax structure remains largely unchanged, but additional incentives have been provided to startups and MSMEs. A reduction in certain import duties on raw materials is aimed at boosting domestic manufacturing, aligning with the ‘Make in India’ initiative.
A key highlight of the budget is the increase in capital expenditure on infrastructure projects, including roads, railways, ports, and urban development, resulting in a multiplier effect on job creation and economic activity. The budget allocates a record sum for railway modernisation and the expansion of metro networks in major cities. The National Infrastructure Pipeline continues to be a priority, with additional funding for smart cities and urban development projects. With a 9.53 percent increase in the defence budget, totalling Rs 6.81 lakh crore, the government is making a clear commitment to modernisation, especially in the face of security challenges from neighbouring countries. The government’s focus on indigenous procurement is a strategic push to reduce dependence on foreign sources and support domestic industries. Simultaneously, the focus on fiscal consolidation is evident with the government projecting a reduction in the fiscal deficit from 4.8 percent to 4.4 percent of GDP. In these uncertain times, it is essential to keep the fiscal deficit within manageable limits to avoid an unsustainable increase in public debt.
The tourism sector is poised to see significant improvements, with plans to boost domestic and international travel, improve connectivity, and develop infrastructure for key tourist destinations. The government’s focus on increasing tourist-friendly measures, including a special initiative for female tourists’ safety, underscores a commitment to making tourism an inclusive growth driver.
The budget strengthens allocations for social welfare schemes, with a focus on healthcare, education, and rural development. The health sector sees an increased budget for strengthening primary healthcare facilities and expanding digital health initiatives along with cuts in duties on life-saving drugs and medicines benefiting patients with chronic diseases like cancer. Rural development programs, including MNREGA, are given adequate funding to ensure employment generation in rural areas. New initiatives presented to promote women’s entrepreneurship and self-help groups.
Agriculture remains a focal point, with the budget increasing allocations for irrigation projects, crop insurance, and rural credit schemes. The government continues to push for modernisation in agriculture through precision farming and digital solutions. Subsidies for fertilisers and farm inputs remain intact. The push towards self-sufficiency in agricultural production is evident, with an emphasis on value addition and agri-exports.
The Green Energy Mission receives additional funding to accelerate the transition towards solar and wind energy. Electric vehicle incentives continue, promoting a cleaner transportation system. The government also proposes new policies to promote green hydrogen production, in line with global decarbonisation goals. The digital economy is another crucial area, with increased funding for technology-driven governance and cybersecurity. The budget introduces measures to strengthen India’s position as a global technology hub, with support for AI, semiconductor manufacturing, and fintech startups. The recapitalisation of public sector banks and measures to improve credit availability for businesses are key highlights.
The looming threats of global economic slowdowns, geopolitical tensions, and inflationary pressures call for swift, strategic action to boost economic resilience. This budget reflects a delicate balancing act: supporting growth in crucial sectors while maintaining fiscal discipline. The path to becoming a Viksit Bharat by 2047 is a marathon, and this budget is aimed at providing the foundation for the journey ahead.