BUDGET 2025-26
By
Vivek Singh
Present situation of economy
India’s real GDP is estimated to grow by 6.4% in FY25 and the growth for
FY26 is projected in the range of 6.3% to 6.8%.
The growth in the first half of FY25 was supported by agriculture and
services while the manufacturing sector faced pressures due to weak global
demand and domestic seasonal conditions.
Manufacturing exports slowed significantly in Q2 FY25 due to weak demand
from destination countries and aggressive trade and industrial policies in
major trading nations.
Urban consumption is facing challenges while rural demand is rebounding
due to good kharif production.
Fiscal Parameters
Fiscal Parameters
Capital Expenditure – Has it
reduced?
Capex has been increased from Rs. 10.2 lakh crore (2024-25)
to Rs. 11.2 lakh crore (3.1% of GDP) in the budget 2025-26.
This capex is only of Central Govt., but Central Govt. gives
grants to States for capex under various schemes which
effectively increases the capex.
So, effective capex has been increased from Rs. 13.2 lakh
crore in FY25 to Rs. 15.5 lakh crore (4.3% of GDP) in 2025-26
Capex is also done through CPSEs which is around Rs. 4 lakh
crore
Effective Capital Expenditure
Comparison of Capital and Revenue
Expenditure in the last 10 Yrs
Capex through NMP
Govt. is planning to bring the National Monetization
Pipeline (NMP) for the next five years (2025-26 to 2029-
30) which will be double the value of the previous NMP.
NMP proceeds generally do not go to Consolidated Fund
of India (CFI) and is spent outside the budget through
PSUs
Personal Income Tax
No Tax Till Rs. 12 lakh income (Standard
Deduction of Rs. 75,000)
1 crore more people will not pay tax
Rs. 1 lakh crore revenue forgone
Presently 75% of people file income tax as
per the new tax regime
The limit for TDS on interest for senior
citizens doubled from Rs. 50,000 to Rs. 1
lakh
Similarly, the annual limit of Rs. 2.40 lakh
for TDS on rent has been increased to Rs. 6
lakh
Are we shifting towards expenditure
tax ?
This is in the context of Personal Income Tax limit increased to
Rs. 12 lakhs
Personal Income Tax has seen an annual growth of more than
20% in the last 3 years, so there was a case of increasing the
exemption limit to Rs. 12 lakhs and giving more money in the
hands of the middle class
• Next year direct tax revenue is projected to increase by 12.7%
• Indirect tax revenue is projected to increase by 8%
Trends in Tax Receipts
Simplification of taxes
Government will be bringing New Income Tax Bill to simplify the
various procedures in personal income tax and corporate income
tax.
Customs duty has been rationalized/reduced
Capital gains tax has been left unchanged
Long term capital gain tax on equity – 12.5%
Short term capital gain tax on equity – 20%
Capital gain tax is calculated separately from the income tax and
Rs. 1.25 lakh of gain is exempt annually
Engines of growth
1. Agriculture
2. MSMEs
3. Investment
4. Exports
Engines of growth: Agriculture
1. PM Dhan-Dhaanya Krishi Yojana - Developing Agri Districts
Programme
The programme will cover 100 districts with low productivity, moderate crop intensity
and below-average credit parameters. It aims to:
enhance agricultural productivity
adopt crop diversification and sustainable agriculture practices
augment post-harvest storage at the panchayat and block level
improve irrigation facilities
facilitate availability of long-term and short-term credit.
Engines of growth: Agriculture
2. Building Rural Prosperity and Resilience
A comprehensive multi-sectoral programme will be launched in partnership with
states
This will address under-employment in agriculture through skilling,
investment, technology, and invigorating the rural economy
The goal is to generate ample opportunities in rural areas so that migration is
an option, but not a necessity
The programme will focus on rural women, young farmers, rural youth,
marginal and small farmers, and landless families
Engines of growth: Agriculture
3. Aatmanirbharta in Pulses
A 6-year “Mission for Aatmanirbharta in Pulses” will be launched with a special focus on
Tur, Urad and Masoor
Central agencies (NAFED and NCCF) will be ready to procure these 3 pulses, as much
as offered during the next 4 years from farmers who register with these agencies and
enter into agreements.
Engines of growth: Agriculture
4. Comprehensive Programme for Vegetables & Fruits
A comprehensive programme to promote production, efficient supplies, processing, and
remunerative prices for farmers will be launched in partnership with states.
Appropriate institutional mechanisms for implementation and participation of farmer
producer organizations (FPOs) and cooperatives will be set up.
Engines of growth: Agriculture
5. Makhana Board in Bihar
A Makhana Board will be established in the state to improve production, processing,
value addition, and marketing of makhana.
The people engaged in these activities will be organized into FPOs.
The Board will provide handholding and training support to makhana farmers
and will also work to ensure they receive the benefits of all relevant
Government schemes.
Engines of growth: Agriculture
6. National Mission on high yielding seeds
A National Mission on High Yielding Seeds will be launched, aimed at:
Strengthening the research ecosystem
Targeted development and propagation of seeds with high yield, pest resistance and
climate resilience, and
Commercial availability of more than 100 seed varieties released since July 2024.
Engines of growth: Agriculture
7. Fisheries
India ranks second-largest globally in fish production and aquaculture. Seafood
exports are valued at Rs.60 thousand crore.
To unlock the untapped potential of the marine sector, Government will bring in an
enabling framework for sustainable harnessing of fisheries from Indian Exclusive
Economic Zone and High Seas, with a special focus on the Andaman & Nicobar and
Lakshadweep Islands.
Engines of growth: Agriculture
7. Mission for Cotton Productivity
For the benefit of lakhs of cotton growing farmers, a ‘Mission for Cotton
Productivity’ will be launched
This 5-year mission will facilitate significant improvements in productivity and
sustainability of cotton farming, and promote extra-long staple cotton
varieties.
The best of science & technology support will be provided to farmers.
Engines of growth: Agriculture
7. Enhanced Credit through KCC
Kisan Credit Cards (KCC) facilitate short term loans for 7.7 crore farmers,
fishermen, and dairy farmers.
The loan limit under the Modified Interest Subvention Scheme will be enhanced
from Rs. 3 lakh to Rs. 5 lakh for loans taken through the KCC.
Engines of growth: Agriculture
8. India Post as a Catalyst for the Rural Economy
India Post with 1.5 lakh rural post offices, complemented by the India Post
Payment Bank and a vast network of 2.4 lakh Dak Sevaks, will be
repositioned to act as a catalyst for the rural economy. The expanded range
of services will include:
DBT, cash out and EMI pick-up
credit services to micro enterprises
Insurance assisted digital services
rural community hub colocation
institutional account services
Engines of growth: MSMEs
1. Revision in Classification Criteria for MSMEs
Engines of growth: MSMEs
2. Significant enhancement of credit availability with guarantee cover
Credit card for micro enterprises: Government will introduce customized Credit
Cards with a Rs.5 lakh limit for micro enterprises registered on Udyam portal
Engines of growth: MSMEs
2. Manufacturing Mission - Furthering “Make in India”
Government will set up a National Manufacturing Mission covering small,
medium and large industries for furthering “Make in India” by providing policy
support, execution roadmaps, governance and monitoring framework for central
ministries and states.
Engines of growth: MSMEs
3. Measures for Labour Intensive Sectors: To promote employment and
entrepreneurship opportunities in labour-intensive sectors, Government will
undertake specific policy and facilitation measures:
Footwear and Leather
The scheme will support design capacity, component manufacturing, and machinery required for production of
non-leather quality footwear, besides the support for leather footwear and products
Toy sector
Make India a global hub for toys. The scheme will focus on development of clusters, skills, and a manufacturing
ecosystem that will create high-quality, unique, innovative, and sustainable toys that will represent the 'Made in
India' brand.
Food Processing
Govt. will establish National Institute of Food Technology, Entrepreneurship and Management in Bihar. The
institute will provide a strong fillip to food processing activities in the entire Eastern region. This will result in
enhanced income for the farmers through value addition to their produce and skilling, entrepreneurship and
employment opportunities for the youth.
Engines of growth: Export
1. Export Promotion Mission
Government will set up an Export Promotion Mission, with sectoral and
ministerial targets, driven jointly by the Ministries of Commerce, MSME, and
Finance.
It will facilitate easy access to export credit, cross-border factoring support,
and support to MSMEs to tackle non-tariff measures in overseas markets.
Engines of growth: Export
2. BharatTradeNet:
A digital public infrastructure, ‘BharatTradeNet’ (BTN) for international trade will
be set-up as a unified platform for trade documentation and financing solutions.
3. National Framework for GCC:
As guidance to states for promoting Global Capability Centres in emerging tier 2
cities.
4. Warehousing facility for air cargo:
To facilitate upgradation of infrastructure and warehousing for air cargo
including high value perishable horticulture produce.
Engines of growth: Export
The government has decided to rationalize tariff structure and
address duty inversion. These will support domestic
manufacturing and value addition, promote exports and facilitate
trade and provide relief to common people
The Govt. has removed 7 tariff rates, leaving behind only eight
remaining tariff rates including zero rate.
Govt. has decided not to levy more than one cess or surcharge
Engines of growth: Investment
Engines of growth: Investment
Engines of growth: Investment
Reforms – as the fuel
Reforms – as the fuel
Deficit trends
Rupee comes from
Rupee goes to
Expenditure of Major Items
Thanks
