On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget for 2025-26, marking her eighth consecutive year delivering the annual financial blueprint. The budget allocates substantial resources to critical sectors such as agriculture, healthcare, defense, education, and renewable energy, with a strong emphasis on boosting economic growth, creating job opportunities, and advancing self-reliance under the ‘Atmanirbhar Bharat’ initiative. Below are the sector-wise key announcements and reforms:
Agriculture & Rural Development: Focus On Productivity And Farmer Welfare
The government has committed ₹1.52 trillion to agricultural development, aiming to enhance productivity and address underemployment in the sector. Key measures include:
- PM Dhan Dhanya Krishi Yojana: Targeting 100 districts with low productivity, this scheme aims to benefit 1.7 crore farmers through crop diversification, irrigation improvements, and better storage facilities.
- Kisan Credit Card (KCC) Expansion: The loan limit under KCC has been increased to ₹5 lakh, providing greater financial access to farmers.
- Self-reliance in Pulses: The government has set a target to achieve self-sufficiency in pulse production within six years.
- Makhana Board for Bihar: A dedicated board will promote Makhana production and marketing in the region.
- Cotton Farmers’ Support: A mission to improve yields and incomes for cotton farmers has been launched.
Healthcare: Strengthening Accessibility And Affordability
The healthcare sector receives an allocation of ₹98,311 crore, aimed at expanding medical infrastructure and care. Key initiatives include:
- Ayushman Bharat Expansion: ₹4,200 crore has been allocated to enhance coverage for vulnerable populations under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY).
- Cancer Care Expansion: 200 daycare cancer centers will be established in district hospitals over the next three years.
- Medical Education: 10,000 new medical seats are proposed for next year, with a target of 75,000 seats over the next five years.
- Gig Workers’ Healthcare: Health insurance coverage under PM Jan Arogya Yojana will now extend to 10 million gig workers.
Defense: Modernization And Indigenous Development
India’s defense budget has been increased to ₹6.81 trillion, with a focus on modernizing capabilities and boosting domestic manufacturing. Key announcements include:
- Self-Reliance in Defense: 75% of the capital budget will be allocated for domestic procurement, reinforcing the ‘Make in India’ initiative.
- Research and Development: Increased funding for projects such as the Advanced Medium Combat Aircraft (AMCA) and Project P75(I) submarines.
- Procurement Plans: Acquisition of six submarines under Project P75(I) to enhance naval capabilities.
Infrastructure: Boosting Connectivity And Sustainability
A significant ₹12 lakh crore has been allocated for infrastructure projects, focusing on roads, highways, railways, and airports. Other key initiatives include:
- Maritime Sector Development: ₹25,000 crore will fund maritime projects, with extended customs duty exemptions for shipbuilding materials.
- Greenfield Airports in Bihar: New airports will be developed to improve regional connectivity.
- UDAN Scheme Expansion: The scheme will be modified to add 120 new destinations, enhancing domestic air connectivity.
Education: Expanding Access And Enhancing Skill Development
The education sector receives major investments aimed at fostering innovation and skill development. Key initiatives include:
- AI Investment: ₹500 crore will be allocated to set up Centres of Excellence in Artificial Intelligence (AI).
- Expansion of IITs and Medical Colleges: Additional seats at IITs and 75,000 new medical seats over five years.
- Atal Tinkering Labs: 50,000 labs will be set up in government schools, focusing on hands-on learning and innovation.
- Skill Development: The government will enhance quality education and ensure graduates are equipped with employable skills.
Tax Reforms: Simplification And Incentives
The government has introduced several key tax reforms to ease compliance and promote entrepreneurship:
- Personal Income Tax Reforms: The government has increased the rebate limit under the new tax regime, offering significant benefits to middle-class taxpayers.
- Startups & MSMEs: Extended benefits for startups and MSMEs, including a ₹10,000 crore fund of funds and term loans up to ₹20 crore for MSMEs.
- Tax Deduction Rationalization: Reductions in compliance burdens, especially for small charitable trusts and the TCS for education remittance.
- Capital Gains: The capital gains limit has been raised to ₹12.7 lakh, and the tax rate has been adjusted for higher incomes, providing relief for middle-class investors.
Renewable Energy & Sustainability
The Budget allocates ₹3 lakh crore for renewable energy projects, including solar, wind, and green hydrogen, aligning with India’s goal of achieving net-zero emissions by 2070. This is in addition to supporting sustainable urban development through a ₹1 lakh crore fund.
Fiscal Deficit
The government has projected a GDP growth rate of 7.2% for FY 2025-26 while maintaining a fiscal deficit target of 4.8%. Capital expenditure has been set at ₹10.18 lakh crore, with gross market borrowings at ₹14.82 lakh crore.
Budget 2025 aimed at driving inclusive growth, modernizing infrastructure, boosting self-reliance, and empowering citizens across various sectors. The focus on agriculture, healthcare, education, and defense reflects a strategic move towards enhancing India’s long-term resilience and global competitiveness. With significant allocations and reforms, the Budget seeks to create employment opportunities, reduce inequalities, and strengthen India’s position as a global leader in technology, defense, and sustainability.