On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2025-26, focusing on stimulating economic growth, enhancing middle-class purchasing power, and promoting sustainable development.
Revised Income Tax Slabs
The government has introduced significant changes to the income tax structure to benefit the middle class:
- Income up to ₹12 lakh: No tax (tax exemption limit increased significantly).
- Income from ₹12 lakh to ₹15 lakh: 10% tax.
- Income from ₹15 lakh to ₹20 lakh: 20% tax.
- Income from ₹20 lakh to ₹24 lakh: 25% tax.
- Income above ₹24 lakh: 30% tax.
These adjustments aim to reduce the tax burden on middle-income earners and stimulate domestic consumption.
Agriculture and Rural Development
The budget allocates substantial resources to enhance agricultural productivity and support rural development:
- Prime Minister Dhan-Dhaanya Krishi Yojana: A six-year program to develop agricultural districts, covering 100 districts and benefiting approximately 1.7 crore farmers.
- Enhanced Credit through Kisan Credit Cards (KCC): Facilitating short-term loans of up to ₹5 lakh for 7.7 crore farmers, fishermen, and dairy farmers.
- Self-Reliance in Pulses: Launching a six-year mission focusing on pulses like Tur, Urad, and Masoor to reduce import dependency.
- Makhana Board in Bihar: Establishment of a dedicated board to promote Makhana cultivation.
en.wikipedia.org
Science, Technology, and Innovation
The budget emphasizes investment in research and development:
- Private Sector-Driven R&D: Allocating ₹20,000 crore to foster innovation and technological advancements.
- PM Research Fellowship: Providing 10,000 fellowships for technological research in IITs and IISc.
- Gene Bank for Crops Germplasm: Establishing a second gene bank with 10 lakh germplasm lines to ensure future food and nutritional security.
en.wikipedia.org
Export Promotion and Trade Facilitation
To boost exports and ease trade processes:
- Incentives for Electronics and EVs: Exemptions for open cells used in LED/LCD TVs, looms for textiles, and capital goods for lithium-ion batteries in mobile phones and electric vehicles.
- Promotion of Maintenance, Repair, and Overhaul (MRO): Ten-year exemptions on goods for shipbuilding and shipbreaking, and extended time limits for exporting railway goods imported for repairs.
- Trade Facilitation Measures: Fixed time limits for finalizing provisional assessments and provisions for voluntary declaration of material facts post-clearance.
en.wikipedia.org
Conclusion
The Union Budget 2025 reflects the government's commitment to fostering economic growth, enhancing middle-class welfare, and promoting sustainable development. By implementing these reforms, India aims to strengthen its position as a global economic leader.
India's Union Budget 2025: Key Developments
reuters.com
Modi turns to India's vast middle class to revive growth in rough global year
Todayapnews.com
Takeaways from India's budget that slashes income tax on the salaried middle class to spur growth
Todayft.com
Modi government rolls out tax cuts in effort to stimulate growth
Today
Sources