Summary of Union Budget 2025-26 (I)

Feb. 2, 2025

Why in news?

The Finance Minister presented the Union Budget 2025-26 with the theme “Sabka Vikas” stimulating balanced growth of all regions.

What’s in today’s article?

Union Budget
Key features of the Union Budget 2025-26

About Union Budget

Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year, from April 1 to March 31.
This statement is called the annual financial statement.
It is divided into 3 parts - Consolidated Fund, Contingency Fund and Public Account.
For each of these funds, the government has to present a statement of receipts and expenditure.

Key features of the Union Budget 2025-26

Quoting Telugu poet Shri Gurajada Appa Rao’s famous saying, ‘A country is not just its soil; a country is its people.’ – the FM presented the Union Budget.
In line with the theme of this year’s budget, the FM outlined the broad Principles of Viksit Bharat.
Six key principles of Viksit Bharat as outlined in the Union Budget 2025-26
- Zero poverty
- Quality education for all
- Affordable, high-quality healthcare
- Skilled workforce with meaningful employment
- 70% women participation in economic activities
- Farmers making India the ‘food basket of the world’
Prioritized Section under the Union Budget 2025-26
- The Budget prioritizes the poor (Garib), youth, farmers (Annadata), and women (Nari).
- It does so while aiming to boost growth, attract private investment, uplift households, and empower the middle class.
Key reform areas as outlined in the Union Budget 2025-26
- Key reform areas include Taxation, Power, Urban Development, Mining, Financial Sector, and Regulations to enhance India's global competitiveness.
Engines in the journey to Viksit Bharat
- Agriculture, MSMEs, Investment, and Exports are identified as growth engines, with reforms as the driving force and inclusivity as the guiding principle.

Growth engines as highlighted in Union Budget 2025-26

Agriculture, MSMEs, Investment, and Exports are identified as growth engines in the Union Budget 2025-26.
1st Engine: Agriculture
- Prime Minister Dhan-Dhaanya Krishi Yojana
  - Launched in partnership with states, covering 100 districts.
  - Aims to increase productivity, promote crop diversification, enhance storage, improve irrigation, and provide credit access.
- Rural Prosperity and Resilience Programme
  - Multi-sectoral initiative with states to tackle underemployment in agriculture.
  - Focus on skilling, investment, technology, and boosting the rural economy.
  - Benefits rural women, young farmers, rural youth, small & marginal farmers, and landless families.
- Mission for Aatmanirbharta in Pulses (6 Years)
  - Special focus on Tur, Urad, and Masoor
  - NAFED & NCCF to procure these pulses from farmers for the next 4 years.
- Key Agricultural Initiatives
  - Comprehensive Programme for Vegetables & Fruits.
  - National Mission on High Yielding Seeds.
  - Five-year Mission for Cotton Productivity.
- Increased Loan Limits for Farmers
  - Kisan Credit Card loan limit raised from ₹3 lakh to ₹5 lakh under a modified interest subvention scheme.
2nd Engine: MSMEs
- Strengthening MSMEs for Growth
  - MSMEs contribute 45% of India's exports and are key to economic development.
  - Investment and turnover limits for MSME classification increased to 2.5 times and 2 times, respectively.
  - Enhanced credit availability with expanded guarantee cover announced.
- Support for Women, SC/ST Entrepreneurs
  - New scheme for 5 lakh first-time entrepreneurs from women, Scheduled Castes, and Scheduled Tribes.
  - Provides term loans up to ₹2 crore over the next 5 years.
- Boosting Manufacturing and 'Made in India'
  - Scheme to make India a global hub for toys under the 'Made in India'
  - Launch of a National Manufacturing Mission to support small, medium, and large industries, reinforcing 'Make in India'.
3rd Engine: Investment
- Investment in People
  - 50,000 Atal Tinkering Labs to be set up in government schools over the next 5 years.
  - Broadband connectivity for all government secondary schools and primary health centres in rural areas under Bharatnet.
  - Bharatiya Bhasha Pustak Scheme to provide digital-form Indian language books for school and higher education.
  - Five National Centres of Excellence for Skilling with global partnerships for “Make for India, Make for the World” manufacturing.
  - Centre of Excellence in AI for Education with an outlay of ₹500 crore.
  - Gig workers to receive identity cards, e-Shram portal registration, and healthcare under PM Jan Arogya Yojana.
- Investment in Economy
  - Infrastructure ministries to create a 3-year PPP project pipeline.
  - ₹1.5 lakh crore allocated for 50-year interest-free loans to states for capital expenditure and reforms.
  - Second Asset Monetization Plan (2025-30) to reinvest ₹10 lakh crore into new projects.
  - Jal Jeevan Mission extended till 2028 with focus on quality, operations, and maintenance through Jan Bhagidhari.
  - Urban Challenge Fund of ₹1 lakh crore for initiatives like ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’, and ‘Water & Sanitation’.
- Investment in Innovation
  - ₹20,000 crore allocated for a private sector-driven Research, Development, and Innovation initiative.
  - National Geospatial Mission to develop geospatial infrastructure and data for urban planning.
  - Gyan Bharatam Mission for survey, documentation, and conservation of 1 crore+ manuscripts.
  - National Digital Repository of Indian Knowledge Systems proposed for knowledge sharing.
4th Engine: Exports
- Export Promotion & Digital Infrastructure
  - Export Promotion Mission to help MSMEs tap into global markets, jointly driven by Commerce, MSME, and Finance Ministries.
  - ‘BharatTradeNet’ (BTN) proposed as a unified digital public infrastructure for trade documentation and financing solutions.
- Boosting Domestic Manufacturing & Industry 4.0
  - Government to develop domestic manufacturing capacities for better integration with global supply chains.
  - Support for domestic electronic equipment industry to leverage Industry 4.0 opportunities.
  - National Framework proposed for Global Capability Centres (GCCs) in emerging Tier-2 cities.
- Infrastructure & Warehousing Support
  - Government to upgrade infrastructure and warehousing for air cargo, with special focus on high-value perishable horticulture produce.