Union Budget presented by the Finance Minister Nirmala Sitharaman on 01st Feb. 2025, focuses on economic growth, middle-class relief & sustainable development.
Read here: Speech of Finance Minister Nirmala Sitharaman
Key Highlights:
1. Taxation Reforms:
Income Tax Relief: The budget proposes a substantial increase in the income tax exemption threshold under the new tax regime. Individuals earning up to ₹12 lakh annually will not be required to pay any income tax, a move designed to enhance disposable income and boost consumer spending.
TDS and TCS Adjustments: The limit for Tax Deducted at Source (TDS) on interest for senior citizens has been doubled from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has been increased from ₹2.4 lakh to ₹6 lakh, providing further financial flexibility.
Tax Exemption on NSS Withdrawals: Withdrawals from the National Savings Scheme made on or after August 29, 2024, will be exempt from tax, encouraging savings among individuals.
2. Agricultural Initiatives:
Prime Minister Dhan-Dhaanya Krishi Yojana: This program aims to develop 100 agricultural districts, benefiting approximately 1.7 crore farmers. It focuses on enhancing agricultural productivity and sustainability.
Enhanced Credit for Farmers: The budget facilitates short-term loans of up to ₹5 lakh for 7.7 crore farmers, fishermen, and dairy farmers through the Kisan Credit Card (KCC) scheme, aiming to support the agricultural sector’s financial needs.
Pulses Production Mission: A six-year mission focusing on pulses like Tur, Urad, and Masoor has been launched to reduce import dependence and achieve self-reliance in pulse production.
3. Science, Technology, and Innovation:
Research and Development Investment: An allocation of ₹20,000 crore has been made to implement a private sector-driven Research, Development, and Innovation initiative, fostering advancements in technology and innovation.
PM Research Fellowship: The government will provide 10,000 fellowships for technological research in premier institutions like IITs and IISc, encouraging innovation and research among the youth.
Gene Bank for Crop Germplasm: Establishment of a second gene bank with 10 lakh germplasm lines is planned to ensure future food and nutritional security.
4. Export Promotion and Trade Facilitation:
Incentives for Electronics and EVs: The budget proposes exemptions for components like open cells for LED/LCD TVs and capital goods for lithium-ion batteries used in mobile phones and electric vehicles, promoting domestic manufacturing.
Promotion of Maintenance, Repair, and Overhaul (MRO): A 10-year exemption on goods for shipbuilding and ship-breaking activities has been introduced, along with an extension of the time limit for exporting railway goods imported for repairs, aiming to boost the MRO sector.
Trade Facilitation Measures: The budget sets a time limit for finalizing provisional assessments and introduces provisions for voluntary declaration of material facts post-clearance, with duty payment and interest but without penalty, simplifying trade processes.
5. Energy and Infrastructure Development:
Nuclear Energy Mission: Aiming for 100 GW of nuclear power by 2047, the government has allocated ₹20,000 crore for research and development of small modular reactors, signaling a commitment to sustainable energy sources.
Infrastructure Investment: The budget outlines plans to enhance infrastructure development, focusing on transportation, digital connectivity, and green energy projects to drive economic growth.
6. Social Welfare and Employment:
Support for Gig Economy Workers: The government plans to formalize gig economy workers, improving their access to healthcare and welfare initiatives, recognizing the growing importance of this workforce segment.
Boost to Startups and Innovation: Investments will be directed towards startups, innovation, tourism, and infrastructure development, fostering a conducive environment for entrepreneurship.
The Union Budget 2025-26 reflects the government’s commitment to fostering economic growth, supporting the middle class, and investing in sustainable development. By implementing these measures, the government aims to strengthen the economy and improve the quality of life for its citizens.
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