Union Budget 2025: Key Reforms for Middle Class, MSMEs, and Infrastructure

by

On February 1, 2025, Finance Minister Nirmala Sitharaman presented India’s Union Budget for the fiscal year 2025-26, introducing significant measures aimed at stimulating economic growth, supporting the middle class, and enhancing various sectors of the economy.

Key Highlights of the Union Budget 2025:

1. Tax Reforms:

  • Income Tax Relief: The budget proposes zero income tax for individuals earning up to ₹12.75 lakh per annum under the new tax regime, aiming to increase disposable income and boost consumption among the middle class. (pib.gov.in)
  • TDS and TCS Rationalization: The limit for Tax Deducted at Source (TDS) on interest for senior citizens has been doubled from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has been increased from ₹2.40 lakh to ₹6 lakh, simplifying tax compliance. (pib.gov.in)

2. Agricultural Initiatives:

  • ‘Prime Minister Dhan-Dhaanya Krishi Yojana’: A new scheme targeting 100 low agricultural productivity districts, benefiting approximately 1.7 crore farmers, to enhance crop yields and ensure food security. (pib.gov.in)
  • Mission for Aatmanirbharta in Pulses: A national mission focusing on self-reliance in pulse production, with special emphasis on Tur, Urad, and Masoor, to reduce dependence on imports. (pib.gov.in)

3. Support for Micro, Small, and Medium Enterprises (MSMEs):

  • Enhanced Credit Guarantee: The budget significantly increases the credit guarantee cover for MSMEs from ₹5 crore to ₹10 crore, facilitating better access to finance and promoting entrepreneurship. (pib.gov.in)

4. Infrastructure and Development:

  • Capital Expenditure: An allocation of ₹11.21 lakh crore for capital expenditure in 2025-26, marking a modest increase from the revised estimate of ₹10.18 lakh crore in the current year, focusing on infrastructure development. (pib.gov.in)
  • Maritime Development Fund: Establishment of a ₹25,000 crore fund, with up to 49% government contribution, to boost the maritime sector and support port infrastructure. (pib.gov.in)

5. Fiscal Management:

  • Fiscal Deficit Reduction: The government targets a fiscal deficit of 4.4% of GDP in 2025-26, down from a revised 4.8% in the current year, indicating a commitment to fiscal prudence. (pib.gov.in)

6. Social Welfare and Employment:

  • Rural Employment Scheme: Continued support for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with an allocation of ₹86,000 crore, aiming to provide employment opportunities and support rural livelihoods. (reuters.com)

7. Energy and Environment:

  • Nuclear Energy Mission: A new mission with an outlay of ₹20,000 crore for research and development of Small Modular Reactors (SMRs), with a goal to have five indigenously developed SMRs operational by 2033, promoting clean energy. (pib.gov.in)

The Union Budget 2025-26 reflects the government’s focus on stimulating economic growth, supporting the middle class, and investing in key sectors to build a resilient and self-reliant India.

Sources:

To read the latest news, visit our News section

Leave a Comment