Sun Feb 02 07:42:22 IST 2025: ## India’s Union Budget 2025: Tax Cuts for Middle Class, Increased Defence Spending, and Mixed Reactions

**New Delhi** – Finance Minister Nirmala Sitharaman presented India’s Union Budget 2025-26 on Saturday, unveiling a series of significant tax reforms and increased spending across various sectors. The budget, themed around achieving a “Viksit Bharat” (Developed India) by 2047, has garnered both praise and criticism.

A key highlight is the substantial tax relief for the middle class. Individuals earning up to ₹12 lakh (approximately $140,000 USD) annually will pay no income tax under the new tax regime, while those earning ₹24 lakh or more can save up to ₹1.10 lakh (approximately $130,000 USD) in taxes. The government will introduce a new Income Tax Bill next week to replace the 1961 Act. Total expenditure is projected at ₹50,65,345 crore, a 7.4% increase over the current fiscal year.

However, the budget also saw a reduction in funding for several intelligence agencies, including the National Security Council Secretariat, raising concerns about national security. Further, tariffs on Harley Davidson motorcycles have been reduced, potentially easing trade tensions with the US ahead of Prime Minister Modi’s visit.

The budget’s reception has been divided. While Prime Minister Modi lauded it as a “people’s budget,” Congress MP Shashi Tharoor criticized it for primarily benefiting voters in Delhi and Bihar, neglecting the unemployed and those outside these regions. Former Finance Minister P. Chidambaram termed the “Viksit Bharat” goal by 2047 a “pipe dream” given the current growth rate.

Despite the mixed reactions, several industry leaders welcomed the budget’s focus on healthcare, infrastructure, and support for MSMEs and startups. Significant allocations were made to the defence sector (₹6,81,210.27 crore, an 8% increase), education, and healthcare, including the establishment of 200 daycare cancer centers. The budget also includes initiatives aimed at improving rural infrastructure, including providing tap water connections and broadband connectivity to schools and health centers. Furthermore, the FDI limit for the insurance sector has been increased to 100%.

The budget’s impact on the stock market and the rupee remains to be seen, although initial reactions were cautiously optimistic. The government’s commitment to fiscal prudence, while aiming for robust growth, is expected to be a key factor in determining market response in the coming days and weeks. The debate on the budget’s merits and demerits is expected to continue in Parliament.

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