The Union Budget 2025-26, presented by the Finance Minister of India, serves as a landmark financial roadmap, shaping the nation’s developmental course. Quoting Telugu poet and playwright Shri Gurajada Appa Rao, the Finance Minister emphasized, “A country is not just its soil; a country is its people,” underlining the government’s people-centric approach.

With a strong focus on inclusive growth and empowerment across all sectors, the budget adopts the theme "Sabka Vikas" (Development for All) to promote balanced development, particularly in agriculture, MSMEs, investment, and exports. By integrating economic reforms, it seeks to tackle long-term challenges while ensuring a sustainable growth trajectory for India.

Key Objectives of Budget 2025-26

The Finance Minister’s budget speech highlighted the government's commitment to six overarching principles to foster growth:

1.     Zero Poverty: Strengthening welfare measures and ensuring economic opportunities for the underprivileged.

2.     Quality Education: Expanding access to high-standard education and training facilities.

3.     Affordable Healthcare: Ensuring universal access to healthcare infrastructure.

4.     Employment for Skilled Labor: Promoting skill development programs and job creation.

5.     Women’s Economic Participation: Targeting 70% women engagement in economic activities.

6.     Agricultural Excellence: Positioning India as a global leader in food production.

Through these principles, the government seeks to lay the foundation for an economically self-sustained and inclusive India.

Four Engines of Economic Growth

The Union Budget’s strategic approach rests on four primary engines of growth—Agriculture, MSMEs (Micro, Small, and Medium Enterprises), Investment, and Exports. These sectors are envisioned as the key drivers of India's economy, with targeted reforms and schemes aimed at boosting their potential.

1. Agriculture: Strengthening Rural Prosperity

Agriculture continues to be the backbone of India’s economy, particularly in rural areas. The government has announced several initiatives to enhance agricultural productivity, promote diversification, and ensure financial stability for farmers.

• Prime Minister Dhan-Dhaanya Krishi Yojana: Aiming to cover 100 districts, this scheme will improve productivity, crop diversification, irrigation facilities, and post-harvest storage, ensuring farmers have access to both short- and long-term credit.
• Mission for Aatmanirbharta in Pulses: A six-year initiative focused on the production of Tur, Urad, and Masoor pulses, with procurement support from NAFED and NCCF.
• Makhana Board: This newly announced body will focus on the cultivation, processing, and export of Makhana (fox nuts), particularly benefiting farmers in Bihar and other regions.
• Kisan Credit Card (KCC): The loan limit has been increased from ₹3 lakh to ₹5 lakh, with modified interest subvention, facilitating easier access to credit for farmers.
• Rural Prosperity and Resilience Program: A targeted program to address underemployment in rural areas, focusing on youth, women, and marginalized farmers.

Through these initiatives, the government aims to achieve agricultural self-sufficiency and improve the livelihoods of farmers.

2. MSMEs: Boosting Small and Medium Enterprises

MSMEs contribute significantly to India’s economy, accounting for nearly 45% of exports. The Union Budget 2025-26 proposes several reforms to enhance the competitiveness and scalability of MSMEs:

• Enhanced Investment and Turnover Limits: The classification limits for MSMEs have been increased, allowing for broader growth and greater benefits for smaller businesses.
• New Entrepreneurship Scheme: Term loans up to ₹2 crore will be provided to 5 lakh women, Scheduled Castes, and Scheduled Tribes entrepreneurs over the next five years.
• National Manufacturing Mission: A comprehensive initiative to strengthen the 'Make in India' campaign, focusing on innovation and export potential.
• Toy Industry Development: The government aims to position India as a global hub for toy manufacturing through a dedicated scheme.

By strengthening MSMEs, the budget seeks to create a more resilient and diversified economy, fostering innovation and job creation.

3. Investment: Infrastructure and Human Capital Development

Investment plays a crucial role in driving economic growth, and the Union Budget places a strong emphasis on both infrastructure development and human capital.

• Human Capital Investment: The government will establish 50,000 Atal Tinkering Labs in government schools, provide BharatNet broadband access to rural schools and health centers, and digitize Indian language textbooks through the Bharatiya Bhasha Pustak Scheme. Moreover, Five National Centres of Excellence for Skilling will be set up to equip youth with skills suited for global job markets.
• Infrastructure Development: A 3-year pipeline for Public-Private Partnership (PPP) projects will be created, and ₹1.5 lakh crore has been allocated as 50-year interest-free loans to states for capital expenditure. Additionally, an Asset Monetization Plan targeting ₹10 lakh crore for reinvestment in new projects is proposed.
• Urban and Water Infrastructure: The Jal Jeevan Mission has been extended until 2028, focusing on water quality and infrastructure maintenance, while the Urban Challenge Fund of ₹1 lakh crore will facilitate sustainable urban development.

These initiatives will ensure that investments are made in both physical and human capital, paving the way for sustainable and inclusive growth.

4. Exports: Expanding India’s Global Trade

India’s exports are crucial for economic growth, and the Union Budget outlines measures to enhance India’s presence in global markets. The Export Promotion Mission aims to support MSMEs in accessing international markets through:

• BharatTradeNet (BTN): A unified digital platform for trade documentation and financing, aimed at simplifying trade processes.
• Export Infrastructure Development: Investment will be made in warehousing and infrastructure, particularly for perishable goods and air cargo, to support export growth.
• Manufacturing for Industry 4.0: Domestic capacities for high-tech industries, such as electronics and automation, will be enhanced.

Reforms: The Backbone of Growth

The Union Budget includes critical reforms aimed at improving the ease of doing business and creating a more investor-friendly regulatory environment.

• FDI in Insurance: The government has raised the Foreign Direct Investment (FDI) cap in the insurance sector from 74% to 100%, encouraging foreign investment in the sector.
• Regulatory Reforms: The establishment of a High-Level Committee on Regulatory Reforms and the introduction of the Investment Friendliness Index will streamline regulations and promote competitive governance.
• Decriminalization of Laws: The Jan Vishwas Bill 2.0 will decriminalize over 100 provisions in various laws, reducing the compliance burden for businesses.

These reforms are intended to enhance India’s investment climate, making it easier for businesses to grow and thrive.

Fiscal Consolidation & Taxation

• Fiscal Deficit: The fiscal deficit for 2024-25 is estimated at 4.8% of GDP, with a target of 4.4% for 2025-26.
• Direct Taxation Reforms: The government has introduced a revised tax structure that offers relief to the middle class:
• No income tax on earnings up to ₹12 lakh per annum.
• Tax deductions for senior citizens’ interest income and rental income have been increased.
• Customs & Indirect Taxation: Several reforms have been announced to support domestic manufacturing, including exemptions for critical minerals and life-saving drugs.

Conclusion

The Union Budget 2025-26 presents a comprehensive blueprint for India's growth, addressing both immediate challenges and long-term objectives. By focusing on agriculture, MSMEs, investment, and exports, the budget lays the foundation for a self-reliant and globally competitive India. With reforms to improve the ease of doing business, enhance fiscal discipline, and promote inclusive growth, the government aims to transform India into a developed nation, achieving the vision of Viksit Bharat.

The targeted schemes and strategic investments across sectors will propel India toward sustainable development, ensuring prosperity for all sections of society. This budget is poised to drive India into a new era of economic growth, with a clear focus on social equity, technological innovation, and global competitiveness.