Sun Feb 02 23:08:27 IST 2025: ## India’s Budget 2025: Tax Cuts for Middle Class, Infrastructure Boost, and Focus on Growth

**New Delhi, [Date]** – Finance Minister Nirmala Sitharaman presented a “reformist” Union Budget 2025 today, focusing on significant tax relief for the middle class and continued investment in infrastructure. The budget, aimed at building a “Viksit Bharat” (Developed India) by 2047, projects a fiscal deficit of 4.4% of GDP for FY26.

A key highlight is the substantial income tax reduction. Individuals earning up to ₹12 lakh annually (₹12.75 lakh for salaried individuals with standard deduction) will pay no income tax under the new tax regime. This change, along with revised tax slabs for higher earners, will benefit over 6.3 crore taxpayers (more than 80% of the total). The government anticipates this will boost household consumption and investment.

The budget also includes:

* **Increased foreign investment:** The foreign investment limit in the insurance sector will rise to 100% from 74%.
* **Infrastructure spending:** Significant allocations continue for infrastructure development, with a record ₹6.81 lakh crore allocated – a 9.53% increase from the current fiscal year. Defense modernization receives ₹1.80 lakh crore, including ₹1.12 lakh crore for domestic procurement.
* **Social sector investment:** Increased allocations for social sectors, supporting the poor, youth, farmers, and women.
* **Make in India push:** Customs duty on flat panel displays will increase to 20% from 10%, promoting domestic manufacturing. Broadband connectivity will be extended to all rural government secondary schools under the BharatNet mission.
* **Support for startups:** A new ₹10,000 crore Fund of Funds scheme will further support startups, doubling the credit guarantee cover to ₹20 crore. A Deep Tech Fund of Funds is also under consideration.
* **Export promotion:** A new Export Promotion Mission will be established, focusing on sectors like leather, handicrafts, and marine products.
* **Gig worker support:** The government will collect the personal information of 1 crore gig workers, providing them with eShram portal IDs and access to social security schemes like Jan Arogya.
* **Tourism boost:** ₹1 lakh crore Urban Challenge Fund will support urban development projects, and the government will develop 50 top tourist sites.

Prime Minister Narendra Modi lauded the budget as a “people’s budget,” designed to fulfill the dreams of every Indian and boost economic growth. While acknowledging the continued commitment to fiscal consolidation, analysts remain watchful of the impact of global uncertainties and the need for increased private investment to sustain the projected growth rate. The new income tax bill will be tabled next week.

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