The Union Budget 2025-2026 reposed faith in the middle class in nation-building and promises to continue the Government’s efforts to accelerate growth for Viksit Bharat, using reforms as fuel and guided by the spirit of inclusivity.
Agriculture, MSME, Investment, and Exports are engines that have been provided with the necessary fuel and oil to deliver the required output by the said Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman, presenting her eighth Budget in the Parliament.
The Prime Minister, Narendra Modi, hailed the Union Budget 2025 as a game-changer for India’s progress, emphasizing its role in accelerating the country’s journey towards Viksit Bharat. He said in a statement that Union Budget 2025 paves the way for innovation, entrepreneurship, and sustainable growth across multiple sectors, including AI, toy manufacturing, agriculture, footwear, food processing, and the gig economy.
A day earlier, the Economic Survey tabled in Parliament projected a growth rate of 6.3-6.8 per cent for the next financial year, stating, “Viksit Bharat@2047 envisions India as a developed nation by 2047, the centenary of our independence. This would entail sustained economic growth of close to 8 per cent every year for at least a decade.”
Adequate reforms will fuel the four engines. Over the past 10 years, the Government has implemented several reforms for the convenience of taxpayers, such as faceless assessment, taxpayers charter, faster returns, almost 99 per cent returns being on self-assessment, and Vivad se Vishwas scheme.
Continuing with these efforts, the Finance Minister reaffirmed the commitment of the tax department to “trust first, scrutinize later”. Sitharaman said that Democracy, Demography and Demand are key pillars of Viksit Bharat’s journey.
She said that the middle class gives strength to India’s growth, and the Government has periodically hiked the ‘Nil tax’ slab in recognition of their contribution. She said the proposed new tax structure will substantially boost consumption, savings and investment by putting more money in the hands of the middle class. The Budget aims to secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance the spending power of India’s rising middle class.
The Budget focuses on people with low incomes (Garib), Youth, farmers (Annadata) and women (Nari) and aims to set new rules for development measures. It has initiated transformative reforms in Taxation, Power Sector, Urban Development, Mining, Financial Sector, and Regulatory Reforms to augment India’s growth potential and global competitiveness.
The broad areas that required attention to stimulate the economy– the Finance Minister has adequately addressed agriculture, MSME, investment, and exports.
Let’s examine each briefly to understand the dynamics behind energizing these sectors.
Agriculture
The Budget announced ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states covering 100 districts to increase productivity, adopt crop diversification, augment post-harvest storage, improve irrigation facilities, and facilitate the availability of longterm and short-term credit.
Micro, Small and Medium Enterprises (MSME) sector
The Finance Minister described MSMEs as the second power engine for development as they constitute 45% of India’s exports. To help MSMEs achieve higher efficiencies of scale, technological upgradation, and better access to capital, the investment and turnover limits for the classification of all MSMEs were enhanced to 2.5 and 2 times, respectively. Further, steps to strengthen credit availability with guarantee cover have also been announced.
Investment
The Finance Minister has prioritized investment in people, economy and innovation to kickstart the third critical growth engine. The Government will set up 50,000 Atal Tinkering Labs with broadband connectivity and provide digital-form Indian language books for schools and higher education. Five National Centres of Excellence for Skilling, a Centre of Excellence in Artificial Intelligence for education, registration on the e-Shram portal and healthcare under PM Jan Arogya Yojana for Gig workers are some of the areas of investment. A few more special interventions in infrastructure and Operation & Maintenance of rural piped water supply schemes, Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation, foundational geospatial infrastructure and data, survey, documenta tion and conservation of more than 1 crore manuscripts have been proposed by the Finance Minister.
Exports
The fourth engine of growth will be exported and jointly driven by the Ministries of Commerce, MSME, and Finance; the Export Promotion Mission will help MSMEs tap into the export market. A BharatTradeNet’ (BTN) for international trade will be a unified platform for trade documentation and financing solutions.
Support will be provided to develop domestic manufacturing capacities for the Indian economy’s integration with global supply chains.
A National Framework for promoting Global Capability Centres in emerging tier 2 cities and the upgradation of infrastructure and warehousing for air cargo, including high-value perishable horticulture produce, are a few actions proposed by the Finance Minister.
Sanjiv Puri, President Confederation of Indian Industry (CII), on Union Budget 2025-26, said the “Union Budget 2025-26 is grow thoriented, reform focused and fiscally prudent while making comprehensive interventions aimed at addressing the needs of all sections of the economy and society, fostering inclusive growth and development. This Budget would kick start a virtuous cycle of consumption-led growth.”
Commenting on the Union Budget 2025-26 proposals announced earlier today, Mr Harsha Vardhan Agarwal, President of the Federation of Indian Chambers of Commerce and Industry (FICCI), said in a statement, “Through the Budget, the government has made a strong effort to address the immediate challenges being faced by the economy, particularly on the consumption front, while keeping an eye on the long-term target of pursuing the vision of ‘Viksit Bharat’. “The Budget proposals will re-energize the economy by lifting the sentiments of the middle class and nudging the private sector to advance its investment plans as demand improves across sectors,” he added.
The Budget holds significant influence over the economy, particularly by impacting prices and incomes. Adjustments to taxes, duties, and subsidies can alter the cost of goods and services, shaping consumer behaviour and overall economic dynamics.