India's Budget 2025-26: Key Highlights and Major Announcements

New Delhi: The Union Budget 2025-26, presented in February 2025, lays out a comprehensive economic roadmap for India’s journey towards ‘Viksit Bharat’ (Developed India). The budget emphasizes secure and inclusive development, boosting private sector investments, strengthening the middle class, and accelerating economic growth.

With a clear focus on agriculture, infrastructure, social welfare, and technological advancements, the budget aims to address both immediate economic concerns and long-term national aspirations.

Agriculture and Rural Development

The government has placed a strong emphasis on agricultural growth and rural prosperity. The Prime Minister Dhan-Dhaanya Krishi Yojana aims to develop agri-districts, covering 100 districts and benefiting approximately 1.7 crore farmers.

A National Mission on High-Yielding Seeds will focus on enhancing productivity, pest resistance, and climate resilience. Additionally, a Makhana Board will be set up in Bihar to improve the production, processing, and marketing of makhana.

In a bid to achieve self-sufficiency in pulses, a six-year mission will be launched with special attention to crops like Tur, Urad, and Masoor. Credit access for farmers has also been expanded through the Kisan Credit Card (KCC), ensuring short-term loans up to Rs 5 lakh for 7.7 crore farmers, fishermen, and dairy farmers.

Boosting MSMEs and Entrepreneurship

Micro, Small, and Medium Enterprises (MSMEs) will benefit from revised classification criteria and enhanced credit availability. The Udyam portal will introduce Credit Cards for Micro Enterprises with a Rs 5 lakh limit, and 10 lakh such cards will be issued in the first year.

Additionally, the budget includes a groundbreaking initiative to empower first-time women, Scheduled Caste (SC), and Scheduled Tribe (ST) entrepreneurs. The program offers a substantial Rs 2 crore term loan scheme, benefiting five lakh entrepreneurs over the next five years.

The budget also outlines support for labour-intensive industries. The Focus Product Scheme for the Footwear and Leather Sectors is expected to generate employment for 22 lakh individuals and achieve a turnover of Rs 4 lakh crore. The toy sector will receive government backing for skill development, cluster formation, and the creation of high-quality, sustainable products under the ‘Made in India’ brand.

Education, Healthcare, and Skill Development

With an emphasis on human resource development, the budget proposes broadband connectivity for all government secondary schools and rural primary healthcare centres. The Atal Tinkering Labs initiative will set up 50,000 labs in government schools over the next five years, promoting innovation and technology-driven education.

The Centre of Excellence in Artificial Intelligence for Education will be launched with a total outlay of Rs 500 crore. To meet the growing demand for medical professionals, 10,000 additional medical seats will be created, with an ambitious target of adding 75,000 seats over the next five years. Additionally, Day Care Cancer Centres will be established in all district hospitals.

For the gig economy, online platform workers registered on the e-Shram portal will now receive healthcare benefits under PM Jan Arogya Yojana. The PM SVANidhi scheme will be revamped to enhance loans from banks and introduce UPI-linked credit cards for street vendors.

Infrastructure and Economic Growth Initiatives

The budget allocates Rs 1 lakh crore for the Urban Challenge Fund, focusing on cities as growth hubs, creative redevelopment, and water and sanitation projects. The Jal Jeevan Mission has been extended until 2028 with an enhanced total outlay to ensure 100 per cent water coverage.

In the energy sector, a Nuclear Energy Mission will be launched under ‘Viksit Bharat,’ with amendments to the Atomic Energy Act and Civil Liability for Nuclear Damage Act to enable private sector participation.

The SWAMIH Fund-2, worth Rs 15,000 crore, aims to complete one lakh dwelling units through blended finance. The Maritime Development Fund, with a corpus of Rs 25,000 crore, will offer long-term financing, with up to 49 per cent government contribution.

Research, Innovation and Technology

A major highlight of the budget is the Rs 20,000 crore allocation for private sector-driven Research, Development, and Innovation. The PM Research Fellowship will provide 10,000 fellowships for research in IITs and IISc.

The National Geospatial Mission will focus on developing geospatial infrastructure and modernizing land records, urban planning, and infrastructure design. Additionally, the Gene Bank for Crop Germplasm will preserve 10 lakh germplasm lines for future food and nutritional security.

The Export Promotion Mission will facilitate easy access to credit, cross-border factoring support, and assistance for MSMEs dealing with non-tariff measures in overseas markets. BharatTradeNet, a new digital public infrastructure platform, will be established for international trade documentation and financing solutions.

The government has also announced a “National Manufacturing Mission” aimed at promoting clean technology (cleantech) manufacturing in India, aligning with the country’s Make in India program.

Expenditure of Major Sectors

The budget outlines key sector-wise expenditures:

Defence: Rs 4,91,732 CR
Rural Development: Rs 2,66,817 CR
Home Affairs: Rs 2,33,211 CR
Agriculture and Allied Activities: Rs 1,71,437 CR
Education: Rs 1,28,650 CR
Health: Rs 98,311 CR
Urban Development: Rs 96,777 CR
IT and Telecom: Rs 95,298 CR
Energy: Rs 81,174 CR
Commerce & Industry: Rs 65,553 CR
Social Welfare: Rs 60,052 CR
Scientific Departments: Rs 55,679 CR

Taxation and Fiscal Policy

The budget introduces Personal Income Tax Reforms with a focus on the middle class. The tax exemption limit has been raised, with different slabs ensuring a more progressive tax system. Senior citizens will benefit from a doubled tax deduction limit, now set at Rs 1 lakh. Additionally, the annual TDS limit on rent has been increased from Rs 2.4 lakh to Rs 6 lakh.

For businesses, the Tonnage Tax Scheme for Inland Vessels and extensions for startup incorporation by five years will provide greater financial flexibility. The FDI limit in the insurance sector has been raised from 74 per cent to 100 per cent.

Customs tariff rationalization will remove seven tariff rates, ensuring minimal cess or surcharge on industrial goods. Import duties on lifesaving drugs, cancer treatments, and rare disease medicines have been revised to ensure better accessibility.

The Budget 2025-26 positions India on a path of robust economic growth with strong investment in agriculture, MSMEs, education, healthcare, and infrastructure. By addressing key social and economic challenges, the government aims to build an inclusive, resilient, and globally competitive economy.

The emphasis on innovation, financial sector reforms, and digital transformation further reinforces India’s ambition of becoming a developed nation by 2047.