Highlights of Budget 2025 Honourable Finance Minister Nirmala Sitharaman listed the top six domains covered in the Union Budget: taxation, power, urban development, mining, the financial sector, and regulatory reforms.
Growth Highlights for MSMEs For startups, credit availability will increase from ₹10 crore to ₹20 crore with guarantee fee moderated at 1% for loans in 27 key sectors outlined for Atma Nirbhar Scheme .
The government also approved term loans for MSMEs up to ₹20 crore.
Customized Credit Cards: ₹5 lakh limit for 10 lakh micro-enterprises on the Udyam portal.
TDS announcements Simplifying TDS: Fewer rates and clearer rules.
TDS on rent: Limit increased from ₹2.4 lakh to ₹6 lakh , helping small taxpayers [194(I)]
Foreign remittances: TCS limit raised from ₹7 lakh to ₹10 lakh under RBI's LRS scheme.
Senior citizens benefit: Interest tax deduction limit doubled from ₹50,000 to ₹1,00,000 .
Relaxation on TCS To reduce compliance challenges, TCS is omitted from transactions involving the sale of goods [section 206C (IH)]
The government proposes to remove TCS on remittances (LRS) for educational purposes if funded by a loan from a recognized financial institution.
Second engine of growth The government is focusing on MSMEs , the second engine of growth , which includes 5.7 crore businesses . Over 1 crore of these are registered and employ 7.5 crore people , contributing 36% of India's manufacturing and 45% of exports .
To help MSMEs grow, the government will:
1. Increase investment limits by 2.5 times
2. Raise turnover limits by 2 times.
A new plan will grant Rs 2 crore loans to women, SC, and ST first-time businesses, boosting youth employment.
The Government also plans to reform Indian postal services into a major public logistics organization. By setting up 1.5 lakh rural post offices that will play a crucial role in boosting the rural economy by transforming India Post.
For Footwear & Leather Industry:
The government is taking steps to boost India's footwear, leather, and toy industries by improving productivity, quality, and global competitiveness . Support for design, machinery, and production of both leather and non-leather footwear .
1. Aims to create 22 lakh jobs .
2. Expected revenue of ₹400 crore .
3. Increase exports by ₹1.1 lakh crore .
For the Toy Industry:
A new program will build India into a global toy hub focusing on manufacturing, skill development, and innovation . This program will encourage sustainable and high-quality toys under "Made in India" .
Farmers to benefit from Union Budget 2025 The Finance Minister shared key plans, making agriculture a top priority. A new program, Dhan Dhanya Krishi Yojana , inspired by the Aspirational District scheme , will be launched. The government in partnership with states, will focus on improving farming in 100 districts with low production and crop growth.
The goal is to boost farming by:
1. Growing different crops
2. Using eco-friendly farming methods
3. Building better storage at local levels
4. Improving irrigation
5. Making loans easier to get
This program is expected to help 1.7 crore farmers .
The Finance Minister introduced a plan to boost vegetable and fruit production , as more people are becoming aware of their nutritional benefits . The government intends to encourage eating healthy by launching targeted programs to increase the availability and accessibility of these basic food items, ensuring that the advantages of increased nutrition reach a broader population.
The Finance Minister announced that Kisan Credit Cards (KCC) will keep offering short-term loans to 7.7 crore farmers, fishermen, and dairy producers . The loan limit under the new plan will increase from ₹3,000 to ₹5,000 for loans taken through KCC, giving more financial support to boost farming and related activities .
Finance Minister, Nirmala Sitharaman announced that the government will undertake a 6-year mission to achieve self-reliance of pulses manufacturing , as well as a comprehensive program for vegetables and fruits. The board will prioritize tur, masoor, and urad dal. Furthermore, a makhana board will be established in Bihar . The scheme's goal is to provide adequate opportunities for rural communities, making migration an option rather than a necessity.
Third engine of growth - Investment
The Finance Minister highlighted investment as the third engine of growth , focusing on people, the economy, and innovation .
Investment in People:
The Sashakt Anganwadi & Poshan 2.0 programs provide nutrition support to:
1. 8 million children
2. Pregnant & breastfeeding mothers
3. 20 lakh teenage girls in aspirational districts & the Northeast
The government will increase funding for these programs to improve support.
Increase Educational minds in India Over the next five years, 50,000 government schools will be equipped with Atal Tinkering Labs to foster students curiosity, innovation, and a scientific mindset. Broadband connectivity will also be provided to all government secondary and primary schools, providing improved access to digital instructional tools.
The Finance Minister emphasized the government's commitment to increasing medical education, pointing out that approximately 1.1 lakh undergraduate and postgraduate medical seats had been added in the last decade, representing a 130% growth. To boost healthcare infrastructure, 10,000 more seats will be added in medical colleges and hospitals next year, as part of a larger plan to add 75,000 seats over the following five years.
IITs will expand its capacity. The overall number of students at 23 IITs has increased by 100% in the recent decade. Additional infrastructure will be developed in five IITs starting after 2014 to aid the addition of 6,500 extra students.
A total of Five National Centres of Excellence for skilling to be set up with global expertise, partnership.
Boost Medical Sector The Finance Minister announced the creation of daycare cancer centers at all district hospitals over the next three years to improve cancer care accessibilit y. In FY 2025-26 alone, 200 centers will be established. Furthermore, the government is committed to improving urban livelihoods, with a continuous emphasis on assisting the urban poor and vulnerable populations through a variety of initiatives targeted at promoting economic stability and job possibilities.
The government will include 36 life-saving medications in the list of medications that are completely exempt from basic customs duty in order to help people with cancer, rare diseases, and chronic disorders.
A list with a 5% customs tax reduction will be expanded to include six life-saving medications.
Bulk medications used in the production of these medications will be fully exempt and subject to a concessional duty.
Patient aid Programs: Pharmaceutical businesses' patient aid programs are completely exempt from Basic Customs Duty (BCD) , as long as the patients receive their medications at no cost. The exemption list will also include 13 new patient support programs and 37 new medications.
The Finance Minister introduced a ₹1 lakh crore Urban Challenge Fund to:
Develop cities into growth hubs
Support creative redevelopment
Improve water and sanitation
How it Works:
The fund will cover up to 25% of project costs .
At least 50% of funding will come from bonds, bank loans, or public-private partnerships (PPPs) .
An initial ₹10,000 crore is set for 2025-26 to start the project.
The Finance Minister highlighted important power sector measures aimed at improving electricity distribution and transmission. The government will incentivize states to modernize electricity distribution and expand intrastate transmission capacity. These initiatives will boost the financial health and operational efficiency of power firms. To assist states in implementing these changes, an additional borrowing limit of 0.5% of GSDP will be allocated based on their performance in this area.
Nuclear Energy Mission to drive India's transition towards clean energy The Finance Minister announced a Nuclear Energy Mission to speed up India's move to clean energy .
Generate 100 GW of nuclear power by 2047
Encourage private sector participation by changing nuclear laws
Invest ₹20,000 crore in research for Small Modular Reactors (SMRs)
Build at least 5 Indian-made SMRs by 2033.
A new UDAN for aspirational Indians The government would introduce a modified UDAN project to connect 120 destinations(airports), according to Finance Minister Nirmala Sitharaman. She stated that the revised plan will benefit almost four crore more passengers over the next ten years when she presented the Union Budget 2025–2026.
Supporting the home electronic equipment business. Finance Minister Nirmala Sitharaman underscored the government's commitment to growing the domestic electronic equipment industry and providing jobs for young people. A national framework will be designed to help states promote Global Capability Centers (GCCs) in rising Tier-2 cities , with an emphasis on talent availability, infrastructure renovations, bylaw revisions, and industry engagement.
Additionally, the government plans to improve air freight infrastructure and warehousing, notably for high-value perishable horticulture produce. Cargo screening and customs procedures will be streamlined to increase efficiency. Sitharaman also stated that reforms have been the driving factor behind the government's programs over the last decade.
Encouraging cooperative federalism that is competitive Finance Minister Nirmala Sitharaman announced that an Investment-Friendliness Index will be introduced in 2025 to encourage states to compete and attract investments. The Financial Stability and Development Council (FSDC) will review existing financial rules to improve their effectiveness and support economic growth.
She also highlighted the Jan Vishwas Act 2023 , which removed criminal penalties from over 1,080 laws , making business regulations simpler and more investment-friendly .
Finance Minister Nirmala Sitharaman said the government aims to reduce central government debt as a share of GDP by managing the budget deficit each year. The FRBM statement outlines a six-year plan for this.
For 2024-25 , the updated estimates are:
Total revenue (excluding borrowings): ₹31.47 lakh crore
Net tax revenue: ₹25.57 lakh crore
Total spending: ₹47.16 lakh crore (includes ₹10.1 lakh crore for infrastructure)
Fiscal deficit: 4.8% of GDP
Adjustments in Tax Rates For tariff rates: In addition to the seven tariff rates eliminated in the 2023–24 Budget, seven more will be eliminated.
Only eight tariff rates including a zero rate will remain after this.
With the exception of a few items where they will be somewhat decreased, duty incidents will be maintained in general.
For cess: There will only be one cess or fee, according to the government's proposal. 82 tariff lines will be exempt from a social welfare surcharge.
Exemption on custom duty The FM suggested that cobalt powder, lithium-ion battery waste and scrap, and 12 other essential minerals be completely excluded from Basic Customs Duty (BCD) .This aims to ensure that these resources are available for manufacturing in India and to provide young people with employment possibilities.
Income tax reforms The language of the new income tax bill is straightforward and unambiguous, guaranteeing simplicity and comprehension for both tax administrators and taxpayers. Its clear language seeks to dispel misunderstandings, making it easier for all parties to understand and apply.
FM said tax proposals are guided by the spirit of promoting ease of doing business, encouraging voluntary compliance, and reducing the compliance burden. The objectives of these proposals include personal income tax reforms with a special focus on the middle class, rationalization of TDS and TCS to ease difficulties, and fostering employment and investment.
Updated ITR Facility The time limit to file updated returns is extended from 2 years to 4 years to encourage voluntary compliance.
No Income Tax payable up to ₹12 Lakh No Income Tax payable up to ₹12 Lakh under new regime 2025-26.
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