Sun Feb 02 13:27:19 UTC 2025: ## Budget 2025: Tax Cuts and Infrastructure Spending Dominate, but Opposition Raises Concerns

**New Delhi, India** – Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 on Saturday, a budget she described as “by the people, for the people, of the people.” The budget focuses heavily on tax relief for the middle class, increased infrastructure spending, and targeted initiatives for specific sectors.

A key highlight is the significant income tax reduction. The new tax regime offers a rebate up to ₹12 lakh (₹12.75 lakh for salaried individuals), eliminating tax liability for nearly 1 crore assessees. This measure, while praised by many, resulted in a revenue loss of ₹1 lakh crore. The government projects income tax revenue growth of 14.4% despite this cut.

The budget allocates ₹11.2 lakh crore for capital expenditure, a marginal increase from the previous year. The Finance Minister defended this, emphasizing the government’s commitment to fiscal prudence and the “multiplier effect” of government capital expenditure. The fiscal deficit is targeted at 4.4% of GDP.

Other key initiatives include:

* **Boosting Exports:** A new product scheme for the leather sector aims to increase exports by ₹1.1 lakh crore and create 22 lakh jobs.
* **Agricultural Initiatives:** The budget includes the Pradhan Mantri Dhan-Dhaanya Krishi Yojana to boost agricultural productivity and the expansion of Kisan Credit Card limits. A Makhana Development Board was also established to support Bihar’s foxnut industry.
* **Infrastructure Development:** Significant investments are planned for infrastructure projects, including Greenfield airports and the Western Kosi Canal project in Bihar.
* **Support for Gig Workers:** A new social security scheme was announced for gig workers.
* **Charitable Trusts:** The registration tenure for smaller charitable trusts has been doubled to 10 years.

**Opposition Criticism:** The budget has faced strong criticism from opposition parties. The Congress described it as lacking new ideas, a “band-aid for bullet wounds,” and criticized the government’s handling of the economy. Other opposition parties echoed these concerns, highlighting the budget’s alleged neglect of issues like unemployment, inflation, and the needs of specific states. Concerns were also raised regarding the focus on Bihar, with accusations that other states have been neglected. Several parties questioned the government’s ability to implement the numerous schemes announced. The CPM criticized the tax cuts as benefiting a small minority of higher earners while neglecting the poor.

**Positive Reception:** However, the budget was lauded by several Chief Ministers, including those of Maharashtra, Assam, and Bihar, who praised the tax relief for the middle class and the various sector-specific initiatives. The IT industry body Nasscom also welcomed the government’s focus on innovation and ease of doing business.

**Economic Outlook:** The bond market responded cautiously optimistic to the budget, while some experts expressed concern about the government’s ability to meet its fiscal targets and address the underlying economic challenges. The budget’s overall impact on the Indian economy remains to be seen, but its focus on tax relief and infrastructure spending has certainly generated a mixed reaction.

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