Union Budget 2025 – Key Highlights

Union Budget 2025 Live Updates: Finance Minister Nirmala Sitharaman is presenting a record eighth consecutive budget, which is expected to contain measures that ease the burden on the middle class struggling with high prices and stagnant wage growth while being fiscally prudent.

As per the Economic Survey tabled on Friday, the Indian economy is expected to grow at 6.3-6.8 percent in 2025-26. While India will need structural reforms and deregulation to reinforce medium-term growth potential, investment activity is expected to pick up. Ahead of the Budget, President Droupadi Murmu addressed a joint sitting of Parliament where she said the government has worked with strong determination to lift the economy out of the state of “policy paralysis” despite global concerns such as aftermath of COVID-19 pandemic and war-related uncertainties.

During the Budget Session, sixteen bills, including the Finance Bill 2025, amendments to the Waqf and Banking Regulations Act, and the merging of the Indian Railways and Indian Railways Board Acts, will be tabled.

FM Nirmala Sitharaman’s 8th budget Speech

The Union Budget 2025 will be Finance Minister Nirmala Sitharaman’s second full-fledged Budget in Modi 3.0 and her eighth budget presentation overall in Parliament. So far, FM Sitharaman has presented six annual and two interim budgets under the Narendra Modi-led NDA governments. Budget 2025 is expected to provide incentives to key areas, including measures to boost the agricultural sector, employment schemes, tax benefits, schemes for MSMEs, and infrastructure development measures.

Indian stock market on Budget Day

The BSE and NSE will remain open on February 1, 2025, despite being a Saturday due to the Union Budget 2025-26. In a circular, the exchanges said: “On account of the presentation of the Union Budget, Exchange shall be conducting a live trading session on February 1, 2025.” usually, the Indian stock market is closed on Saturdays and Sundays.

Key Highlights of the Budget

• Gig workers to get healthcare under PM Jan Arogya Yojana.

Budget 2025 Key Highlights: The Union Finance Minister Nirmala Sitharaman announced that the gig workers will be provided healthcare under PM Jan Arogya Yojana. The government also announced their plans to create identity cards and registration on the e-Shram portal for the workers.

• Kisan Credit Cards’ loan limit increased to ₹5 lakh from ₹3 lakh.

Budget 2025 Key Highlights: Union Finance Minister Nirmala Sitharaman announced that the loan limit for the Kisan Credit Cards (KCC) will be increased to ₹5 lakh under the Modified Interest Subvention Scheme, according to the budget announcement. The KCC gives farmers, fishermen, and dairy farmers to take short-term loans from the government.

• FM Sitharaman proposes to add 35 additional capital goods for EV battery manufacturing and 28 additional capital goods for mobile phone battery manufacturing. 

Budget 2025 Key Highlights: FM Sitharaman proposes to add 35 additional capital goods for EV battery manufacturing and 28 additional capital goods for mobile phone battery manufacturing.

• Building on National Action Plan for Toys

Scheme to make India a global hub for toys. Development of clusters, skills, a manufacturing ecosystem that will create high quality, innovative, sustainable toys that will represent the Made in India br

• Expansion in IITs

Nirmala Sitharaman announced the expansion in five IITs starting with IIT Patna. Additional infrastructure will be created in the five IITs started after 2014 education for 6,500 more students, hostel and other infrastructure capacity and IIT Patna will also be expanded.

• MSME cover enhanced to ₹10 crore

MSME cover enhanced to ₹10 crore from an earlier level of ₹5 crore.

• Government to launch new AIF fund of ₹10,000 crore for startups. 

Nirmala Sitharaman announced that te government plans to launch a new ₹10,000 crore AIF fund of fund for startups.“Alternate Investment Fund, AIF for startups have received commitments of more than ₹91,000 crore. These are supported by the fund of funds set up with the government of India’s contribution of 10,000 crore rupees. Now a new fund of funds with an expanded scope and a fresh contribution of another ₹10,000 crore will be set up,” said Sitharaman.

• PM Dhan-Dhaanya Krishi Yojana to help 1.7 crore farmers

Prime Minister Narendra Modi’s Dhan-Dhaanya Krishi Yojana, which is set to be launched, aims to help 1.7 crore farmers in India. This scheme will cover 100 districts with low productivity.

• What did FM say on income tax

“To tax payers upto ` 12 lakh of normal income (other than special rate income such as capital gains) tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them. The total tax benefit of slab rate changes and rebate at different income levels can be illustrated with examples,” said Nirmala Sitharaman.

Revised income tax slabs

According to the Ministry of Finance, the revised income tax slabs under the new tax regime will attract the following:

1) Income between nil to ₹4 lakh – Nil tax bracket

2) Income between ₹4 lakh to ₹8 lakh – 5% tax bracket

3) Income between ₹8 lakh to ₹12 lakh – 10% tax bracket

4) Income between ₹12 lakh to ₹16 lakh – 15% tax bracket

5) Income between ₹16 lakh to ₹20 lakh – 20% tax bracket

6) Income between ₹20 lakh to ₹24 lakh – 25% tax bracket

• WAMIH Fund 2 for middle class families

The existing Special Window for Affordable, Mid-Income Housing (SWAMIH) scheme: Aims to help middle-class families who pay EMIs on loans taken for apartments, and rent on their current dwellings. So far, 50,000 dwelling units in stressed housing projects have been completed and keys handed over. Another 40,000 units are to be completed in 2025. SWAMIH Fund 2 announced today, will be established as a blended finance facility. This will include contributions from the Indian government, banks and private investors.An outlay of Rs 15,000 crore is allotted for the expeditious completion of another 1 lakh units.

• FDI in insurance hiked to 100%: Paves the way for entry of foreign giants, inflows

Finance Minister Nirmala Sitharaman has announced a significant hike in foreign direct investment (FDI) in the insurance sector, from 74 per cent to 100 per cent. This move is expected to attract global insurance giants and increase capital inflows.A new income tax bill will be introduced next week. Central KYC registry to be rolled out in 2025 for streamlined financial processes.

• Loan limit under MISS will be increased from ₹ 3 lakh to ₹ 5 lakh

The Finance Minister announced that the loan limit under the Modified Interest Subvention Scheme (MISS) will be increased from ₹ 3 lakh to ₹ 5 lakh. Currently, under MISS, farmers engaged in Agriculture and other allied activities can acquire Kisan Credit Card loans up to ₹ 3 lakh at a benchmark rate of 9%. However, the Centre provides 2% interest subvention on the benchmark rate, bringing down the effective rate of interest to 7 per cent. An additional 3% concession for prompt and timely repayment further reduces it to 4% per year.

• A new scheme will be launched for 5 lakh SC/ST women entrepreneurs

The Finance Minister announced that a new scheme will be launched for five lakh Scheduled Castes and Scheduled Tribes (SC/ST) women entrepreneurs. This will involve giving term loans of up to Rs 2 crore during the next five years.

• 50,000 Atal Tinkering Labs will be set up in government schools

Finance Minister Nirmala Sitharaman announced that 50,000 Atal Tinkering Labs will be set up in government schools over the next five years to “foster scientific temper among young minds.” The Centre’s Atal Innovation Mission introduced Atal Tinkering Labs in 2016-17 and around 10,000 such labs have already been set up in schools across the country. The Centre provides funds to schools to set up the lab and operate and maintain it for five years. These labs contain equipment like 3D printers, and tools and kits for students to learn STEM (science, technology, engineering and math) concepts, including aspects of robotics and artificial intelligence. These labs are meant for students in classes 6 to 12.

• Fiscal Deficit Projections & Market Borrowing

The fiscal deficit for FY25 is projected at 4.8% of GDP, with the target for FY26 set at 4.4%. Net tax receipts for FY26 are estimated to reach ₹ 28.37 lakh crore, while gross market borrowing for the same fiscal year is projected at ₹ 14.82 lakh crore. In terms of tariff adjustments, there is a proposal to eliminate 7 additional tariff rates, building on the previous budget’s removal of tariffs. Lastly, the revised capital expenditure for FY25 has been set at ₹ 10.18 lakh crore.

• Announcement in Tourism and Innovation

The Indian government has announced several initiatives to promote tourism and innovation across the country. The top 50 tourism destination sites will be developed in collaboration with states, focusing on enhancing infrastructure to boost tourism. States will also provide land for these projects. To further encourage local tourism, Mudra loans will be made available for homestay businesses. Additionally, medical tourism will be prioritized with the promotion of “Heal-in-India” initiatives to attract international patients. The government will explore the creation of a deeptech fund-of-funds to support technological innovation and startups in the tourism sector. A National Geospatial Mission will also be launched to improve spatial data and mapping for better planning and development.

• Announcement in Energy, Infrastructure, and Regional Development

India is aiming for a significant transition in its energy sector, with a target of 100 GW of nuclear energy by 2047. A new nuclear energy mission will focus on developing small modular reactors, with an allocated outlay of ₹ 20,000 crore. States will also be given an additional borrowing capacity of 0.5% of their Gross State Domestic Product (GSDP) to implement select reforms. The shipbuilding industry will receive a boost through a revamped financial assistance policy, and a maritime development fund worth ₹25,000 crore will be established to support the sector. The Udaan scheme will be modified to connect 120 new destinations across India, with greenfield airports in Bihar receiving financial backing. The Western Kosi Canal project in Bihar will also be supported with funding.

• Announcement in Education, Healthcare, Infrastructure, and Social Welfare

In education and healthcare, the government will ensure broadband connectivity for all government secondary schools and primary healthcare centers. To boost vocational training, five National Centers of Excellence for Skilling will be established. Additional infrastructure will be provided for the five IITs set up after 2014, while three Centres of Excellence in Artificial Intelligence for education will be created, with a ₹500 crore outlay. The healthcare sector will see the establishment of day-care cancer centers in every district within three years, with a target of 200 centers by 2025-26. Additionally, 10,000 new seats will be added to medical colleges and hospitals by FY26. A new social security scheme for gig workers will be introduced, offering registration and insurance through the E-shram portal. Infrastructure projects will also see major investments, with ₹ 1.5 lakh crore in 50-year interest-free loans for state capital expenditure (Capex) and the creation of an Urban Challenge Fund with a ₹1 lakh crore investment. MoUs under the Jal Jeevan Mission will focus on boosting water supply infrastructure across states.

The Union Budget 2025 comes at a pivotal moment, with India’s economic growth slowing to a four-year low and global uncertainties—fueled by U.S. tariff threats and geopolitical tensions—posing fresh challenges. Against this backdrop, the Budget layed out a roadmap for economic resilience, focusing on tax relief, infrastructure expansion, and sectoral reforms. With significant income tax cuts, higher exemptions, and fresh incentives for startups and MSMEs, the government aims to boost middle-class incomes and drive long-term sustainable growth.

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