New Delhi February 2 2025: India will focus on boosting the spending power of its middle class population, encouraging inclusive development and private investment to strengthen growth, Finance Minister Nirmala Sitharaman said on Saturday, announcing the annual budget.
Measures to assist the poor, the youth, farmers and women were also a part of the budget for 2025-26, said Sitharaman, highlighting plans for “transformative reforms in taxation”.
Here are the highlights of the budget:
RELIEF TO MIDDLE CLASS TAXPAYERS
* Raises threshold of nil tax slab for income tax payers to 1.2 million rupees ($13,900) per year
* Proposes to change income tax slabs, tax rates to benefit all taxpayers
* Maximum tax rate of 30% raised to incomes of 2.4 million rupees and above under new tax regime
* To introduce Income Tax Bill in parliament to simplify tax rules, reduce litigation
* Analysts say tax cuts to boost consumer demand
GDP GROWTH/FISCAL DEFICIT
* Expects nominal GDP growth of 10.1% y/y in 2025/26
* Expects fiscal deficit at 4.4% of GDP in 2025/26 vs revised deficit of 4.8% of GDP in current fiscal year
* Gross borrowings seen at 14.82 trillion rupees for 2025/26
* Net borrowings seen at 11.54 trillion rupees for 2025/26
REVENUE RECEIPTS
* Total revenue receipts for 2025/26 seen at 34.20 trillion rupees vs revised 30.88 trillion rupees for current fiscal year
* Net tax revenue receipts for 2025/26 seen at 28.37 trillion rupees
EXPENDITURE
* Total budget spending for 2025/26 estimated at 50.65 trillion rupees vs revised spending of 47.16 trillion rupees in 2024/25
* Revised spending target for 2024/25 lowered by 1.04 trillion rupees against initial budget estimates
* Capital spending target for 2025/26 set at 11.2 trillion rupees, against revised target of 10.18 trillion for current fiscal year
RAISES FDI LIMIT
* Proposes to raise foreign direct investment limit in insurance to 100% from 74%
* Taxation, power sector, urban development, mining, financial sector and regulatory reforms focus of budget
FARM OUTPUT
* To launch six year mission to boost pulses output
* To launch five year mission for cotton production
MANUFACTURING INCENTIVES
* To set up National Manufacturing Mission to provide policy support and to further ‘Make in India’ manufacturing programme
* Credit guarantee cover for small and medium firms enhanced to 100 million rupees
* Fund of funds to be set up for start-ups with government contribution of 100 billion rupees
* To set up five national skilling centres to enhance skilled manpower for manufacturing
* To provide 1.5 trillion rupees 50-year interest free loans to states for infrastructure development
* Announces Maritime Development Fund with a corpus of 250 billion rupees
* To set up Urban Challenge Fund worth 1 trillion rupees
* To enhance regional air connectivity to 120 new destinations over 10 years
* Policy for critical minerals development to be launched
