Undoubtedly, the Union Budget 2025-26 presented by Finance Minister Nirmala Sitharaman is a historic one, which includes significant provisions for the relief of the poor, youth, women, farmers, and the middle class, alongside major economic reforms. The Finance Minister has focused on increasing infrastructure investment, boosting domestic demand in the face of global trade uncertainties, strengthening the rural economy, promoting climate-friendly farming, focusing on manufacturing sectors that generate employment, and using the mantra of Reform, Perform, and Transform to drive the economy forward with the goal of making India a developed country by 2047.
Clearly, in this new budget, Finance Minister Sitharaman has emphasized capital expenditure on economic infrastructure, strengthening the rural economy, and providing incentives for agriculture, irrigation, and warehousing. Special focus has also been placed on boosting the MSME (Micro, Small, and Medium Enterprises) sector, increasing their investment and turnover limits. Moreover, the budget includes incentives for the housing sector, digital revolution, and clean energy.
The Finance Minister has also made provisions for increasing employment among the youth, adapting digital skills training programs to meet emerging job market needs, and attracting foreign investment. A significant step is the increase in the borrowing limit under the Kisan Credit Card from ₹3 lakh to ₹5 lakh.
It is also noteworthy that the Finance Minister has introduced strategies to increase exports from job-oriented sectors and create new employment opportunities. Large announcements have been made to turn India into a new manufacturing hub, with significant incentives for textiles, leather, electric and electronic industries, and seafood industries. A special proposal has been made to make India the universal hub for toys.
Finance Minister Sitharaman has ensured the establishment of digital public infrastructure in the form of the India Trade Net (BTN). The Export Promotion Mission has been launched, and a proposal has been made to increase the loan limit for micro, small, and medium enterprises (MSMEs) from ₹5 crore to ₹10 crore. Additionally, special provisions have been made for the digital economy, with higher allocations for the defense sector, given the rising external security threats from countries like China, Pakistan, and Bangladesh.
Indeed, the Finance Minister has made significant efforts in this budget to increase the purchasing power of the middle class by cutting taxes and simplifying the tax structure. This will stimulate spending and savings, thus driving demand in the economy. The new tax regime offers unprecedented relief to taxpayers, with substantial changes in income tax slabs to encourage more taxpayers to adopt it.
It is also significant that the Finance Minister has announced a new tax bill under the reform agenda, which aims to replace the current Income Tax Act of 1961 with a completely new law, meeting the current needs and eliminating outdated provisions, reducing tax disputes, and simplifying compliance for taxpayers.