Sat Feb 01 19:07:11 UTC 2025: ## Sitharaman Unveils Record-Breaking Union Budget 2025-26: Focus on Growth and Tax Relief

**New Delhi, February 1, 2025** – Union Finance Minister Nirmala Sitharaman today presented her record-breaking eighth consecutive Union Budget, focusing on four key engines – agriculture, MSMEs, investment, and exports – to propel India towards its “Viksit Bharat” (developed India) goal. The budget, presented amidst economic slowdown, prioritizes both rural prosperity and urban development, particularly for workers.

A major highlight is the significant tax relief for individuals. Under the new tax regime, those earning up to ₹12 lakh annually will not have to pay any income tax. This measure, along with broader tax rate reductions, aims to boost consumption and benefit the middle class, a key voter segment ahead of upcoming state elections in Delhi and Bihar.

The budget allocates a record ₹1,92,387 crore for capital expenditure, with no reduction in public spending in this area. Further, two key amendments – to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act – are proposed to enhance energy security and encourage private sector participation in nuclear energy. This signals a continued focus on energy independence, previously highlighted in the July 2024 budget.

Significant allocations were also made to several sectors. The Women and Child Development Ministry received ₹26,889 crore, an increase from the previous year. A new scheme will provide entrepreneurship loans of up to ₹2 crore to 5 lakh women over the next five years. Bihar received specific attention, with announcements including a new Makhana Board and financial support for infrastructure projects.

However, the budget allocated only ₹574.80 crore for the decadal census, raising concerns about its timely completion. The defense budget saw an increase to ₹6,81,210 crore.

The fiscal deficit has been pegged at 4.8% of GDP for FY25 and 4.4% for FY26. The Finance Minister stated that the new income tax bill will be presented to Parliament next week and referred to a Standing Committee.

While the budget was welcomed by some, others criticized the lack of sufficient funds allocated to address specific state needs, such as Kerala’s requests for landslide rehabilitation and climate change mitigation. Market reactions were mixed, with benchmark indices initially showing gains before experiencing a decline following the speech. The government aims to generate increased income tax revenue despite the significant tax cuts.

The budget also includes several initiatives related to digitalization, including a new digital public infrastructure for international trade and the setting up of a Centre of Excellence for Artificial Intelligence in Education. Further, significant investments are proposed in skilling, education, and healthcare. The government’s commitment to reforms across various sectors is evident, aiming for a “minimum government and trust-based governance” approach.

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