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  1. Invest Online
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  3. Invest Guide
  4. March 2025
    5. Budget 2025

Invest Guide March 2025

Budget 2025 - Key Highlights

The Middle-Class Boom, Tax Relief, Agricultural Reforms & More -

On February 1, 2025, Finance Minister Nirmala Sitharaman presented her eighth consecutive Union Budget, outlining a vision for India's growth with a strong focus on agriculture, energy, and international trade. Wearing a Madhubani silk saree, a tribute to Bihar's cultural heritage, she announced several significant measures, including tax relief for the middle class with no income tax on earnings up to ₹12 lakh, the launch of the PM Dhan-Dhaanya Krishi Yojana, and the creation of a Makhana Board.

The budget also highlighted initiatives like Aatmanirbharta in pulses and a new Nuclear Energy Mission. Calling it a budget "by the people, for the people," the Finance Minister's proposals sparked discussions, even as they made waves in political circles. Amid an economic slowdown, with GDP growth at 6.4% compared to the 8.2% projected in the previous year, the government reiterated its commitment to unlocking India's potential under PM Modi's leadership. Finance Minister Sitharaman emphasized that Budget 2025 is focused on accelerating growth, viewing the next five years as a crucial period for realizing "Sabka Vikas" (development for all). With a focus on the Garib, Youth, Annadata, and Nari Shakti, she proposed major initiatives across 10 key areas to drive inclusive growth and strengthen the economy.

Major initiatives and key features of the Union Budget for the next financial year (2025-26):

The Path to Progress - Engines of Development

  • Agriculture
  • MSME
  • Investment
  • Exports

The driving force: Reforms

The guiding principle: Inclusivity

The goal: Viksit Bharat (Developed India)

Aspirations for Viksit Bharat -

  • Economic growth
  • Technological upgradation
  • Infrastructure development
  • Social empowerment
  • Sustainability

“Bharat cannot limit reform to just economic reforms. We must move forward in every aspect of life towards the direction and reform. Our reforms should also align with the asperations of a VIKSIT BHARAT by 2047.”- Shri Narendra Modi

Key Highlights of Budget 2025: A Path to Growth and Inclusivity

  • New Tax Regime: Finance Minister Nirmala Sitharaman proposed a revised tax structure, offering a significant relief with zero income tax on earnings up to ₹12 lakh under the new regime.
  • Capital Expenditure (Capex): The budget for FY2025-26 has allocated ₹11.21 lakh crore for capital expenditure, a rise from ₹11.11 lakh crore in FY2024-25, reflecting a strong push for infrastructure development.
  • Bihar Makhana Board: A major initiative in Budget 2025 includes the creation of a Makhana Board in Bihar to boost production, processing and marketing, strengthening India's position in the Makhana industry.
  • Job Creation Scheme: The government has unveiled plans to generate 22 lakh jobs, particularly in the footwear and leather sector, aiming to enhance productivity, quality, and global competitiveness.
  • UDAN Scheme Expansion (Aviation): A revamped UDAN scheme is set to enhance regional connectivity, with plans to add 120 new destinations and serve 4 crore passengers over the next decade.
  • Supporting MSMEs: Enhanced funding options and credit facilities for medium and small businesses.
  • Housing & Urban Development: The raise of TDS exemption limit on rental income from ₹2.4 lakh to ₹6 lakh and simplifies the TDS framework by reducing rates and increasing deduction thresholds for clarity.
  • Education schemes: Key education initiatives, including 50,000 Tinkering Labs, national skilling centres, fellowships for tech researchers, broadband for rural schools and health centres, the Bharatiya Bhasha Pustak Scheme, and a ₹500 crore Centre of Excellence in AI for education.

Sector-wise breakup of Budget 2025's major announcements:

Agriculture:

  • Adopt crop diversification
  • Improve irrigation facilities
  • Facilitate short-term loans for 7.7 crore farmers, fishermen, and dairy farmers with enhanced loans of ₹5 lakh
  • Six-year new mission for Atmanirbharta in pulses with a special focus on Tur, Urad, and Masoor
  • Five Year Missions to facilitate improvement in cotton productivity
  • Makhana board in Bihar; to improve production, processing, value addition, marketing
  • A national mission on high-yielding seeds
  • Sustainable harnessing of fisheries with a focus on Andaman and Nicobar and Lakshadweep
  • Ample opportunities in rural areas so migration is an option and not a necessity
  • The Focus Product Scheme for Footwear and Leather to create 22 lakh jobs, generate ₹4 lakh crore in turnover and boost exports by over ₹1.1 lakh crore
  • India Post will be transformed into a major public logistics organization to support Viswakarmas, entrepreneurs, women, self-help groups, MSMEs, and large businesses

Healthcare & Education:

  • Improved access to lifesaving medicines
  • Addition of 36 lifesaving drugs/medicines in the exempted list; 6 medicines in 5% duty list; 37 medicines and 13 new patient assistance programmes in the exempt list. (Medicines for rare diseases, cancer, severe chronic diseases)
  • 10,000 seats to be added in medical colleges and hospitals in FY26
  • To set up day-care cancer centres in all district hospital
  • Broadband connectivity to primary health centres in rural areas
  • 50,000 Atal Tinkering Labs to be set up in govt schools in the next 5 years to cultivate the spirit of curiosity and innovation, and foster scientific temper
  • A proposal to launch the Bharatiya Bhasha Pustak Scheme, offering digital Indian language books for school and higher education.
  • Five National Centres of Excellence for skill development will be established.
  • Additional infrastructure will be created at the five IITs established post-2014 to accommodate 6,500 more students.
  • A Centre of Excellence in Artificial Intelligence for education will be set up.
  • A new scheme will be launched to promote the socio-economic upliftment of urban workers, aimed at enhancing their income opportunities.

Development of Nuclear Reactors in India:

  • `20,000 crore has been allocated for the development of small nuclear reactors, targeting the generation of 100 gigawatts of nuclear energy.
  • Five indigenous small nuclear reactors are set to be developed by 2033.

Infrastructure and Economy Highlights:

  • Each infrastructure ministry will create a 3-year project pipeline for implementation through the PPP (Public-Private Partnership) mode.
  • States will be encouraged to prepare similar pipelines and can access support from the IIPDF (India Infrastructure Project Development Fund) for PPP proposals.
  • The government will provide ₹1.5 lakh crore in 50-year interest-free loans to states for infrastructure development.
  • A Maritime Development Fund with a corpus of ₹25,000 crore will be established.
  • A new policy will be introduced for the development of critical minerals.

DIRECT TAX -

Key Highlights of the New Income Tax Bill:

  • A new Income Tax Bill will be introduced next week.
  • No income tax will be levied on earnings up to ₹12 lakh per annum.
  • Salaried individuals will pay no tax on ₹12.75 lakh due to a ₹75,000 standard deduction.
  • Tax slabs and rates will be revised across the board.
  • A simplified tax structure is proposed under the new Income Tax Bill.

New Tax Slabs:

  • Up to ` 4 lakh - No tax
  • ₹4 lakh - ` 8 lakh - 5%
  • ₹8 lakh - ₹12 lakh - 12%
  • ₹12 lakh - ₹16 lakh - 15%
  • ₹16 lakh - ₹20 lakh - 20%
  • ₹20 lakh - ₹24 lakh - 25%
  • Above ₹24 lakh - 30%

MSME:

  • Startup Funding: An additional ₹10,000 crore will be allocated to support startup incubation programs, fostering innovation and growth.
  • MSME and Start-Up Credit Expansion: Enhanced credit guarantees will ease access to finance for MSMEs and startups, aiding recovery.
  • Support for Gig Workers: Gig workers will receive health insurance under PM-JAY, along with identity cards and registration on the e-Shram portal for better welfare benefits.
  • Research and Innovation: ₹20,000 crore will be invested in private-sector-driven research and innovation to support technological advancements.
  • Revised MSME Classification: Investment and turnover limits for MSMEs will be increased, allowing more businesses to benefit from incentives.
  • Boost for Footwear & Leather Industry: A new scheme aims to create 22 lakh jobs, generate ₹4 lakh crore in revenue, and drive ₹1.1 lakh crore in exports.
  • Boost for the Toys Industry: A dedicated scheme will position India as a global hub for high-quality, made-in-India toys.

Research, Development and Innovation:

  • ` 20,000 crore allocated for private sector-driven R&D and Innovation initiatives from the July Budget.
  • Exploration of a Deep Tech Fund of Funds to boost next-gen startups.
  • 10,000 fellowships for tech research in IITs and IISc under the PM Research Fellowship scheme with increased financial support.
  • Launch of a National Geospatial Mission.

Conclusion Thoughts -

In conclusion, the Union Budget 2025 lays out a strong plan to boost India's growth by focusing on key areas like innovation, education, and infrastructure. With measures to encourage private sector investment, increase foreign investment and improve skills development, the budget aims to create more opportunities for the economy to grow. It also focuses on uplifting urban workers and supporting new technologies. Overall, the budget sets a positive path for a more inclusive and digitally advanced India.
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