Budget 2025: Key Announcements

                                             …to Boost Growth and Empower Citizens

New Delhi: Finance Minister Nirmala Sitharaman on Saturday, presented her eight consecutive Union Budget 2025-26 with a booster to the middle class, boosting growth in various sectors, and empowering the middle class, micro and small enterprises, as well as senior citizens.

FM announced that no income tax will be payable for annual income upto Rs 12 lakh.

To strengthen the rural economy, Sitharaman launched the Dhan Dhanya Krishi Yojana, which will be implemented in 100 districts across the country. The scheme aims to benefit 1.7 crore farmers, create rural job opportunities, and reduce migration by making agriculture more lucrative.

She also announced that the annual limit for TDS on rent has been raised from Rs 2.40 lakh to Rs 6 lakh, benefiting small taxpayers receiving smaller payments.

While the TDS threshold on rent has been increased to Rs 6 lakh, TCS on education loans up to Rs 10 lakh (from specified financial institutions) will be removed.

The government will rationalise the Tax Deducted at Source (TDS) by reducing the number of rates and thresholds, making the process more taxpayer-friendly.

FM also announced that 36 Life-Saving Drugs have been added to the list of medicines fully exempt from Basic Customs Duty (BCD).

She also said that top 50 tourism destination sites will be developed in partnership with states to boost tourism across India and a focus will be placed on promoting medical tourism and “Heal-in-India” initiatives to attract international patients.

In a move aimed at formalising the gig economy, Sitharaman announced that the government will provide identity cards and registration for gig workers. The initiative is expected to enhance social security and streamline benefits for the country’s growing freelance and contractual workforce.

The finance minister unveiled a new scheme to position India as a global hub for toy manufacturing. The initiative will focus on cluster development, skill-building, and improving the manufacturing ecosystem to promote high-quality, innovative, and sustainable Indian-made toys.

Higher Tax Relief for Individuals and Senior Citizens
Under the new tax regime, taxpayers earning up to Rs 12 lakh annually will be exempt from paying income tax, except on special rate income such as capital gains. Individuals with an annual income of Rs 18 lakh will also benefit from a Rs 70,000 tax reduction. Additionally, the tax deduction limit on interest income for senior citizens has been increased from Rs 50,000 to Rs 1 lakh.

Support for Micro and Small Enterprises
The government has raised the threshold for micro and small enterprises (MSEs) to qualify for enhanced credit from Rs 5 crore to Rs 10 crore, unlocking an additional Rs 1.5 lakh crore in credit over the next five years. Startups in 27 focus sectors will see their borrowing limit increased from Rs 10 crore to Rs 20 crore, with a reduced guarantee fee of 1%.

Incentives for Exporters and MSMEs
Sitharaman announced that MSMEs involved in exporting goods will benefit from easier access to term loans of up to Rs 20 crore. The government also plans to revise the investment and turnover limits for MSMEs, enhancing these to 2.5 and 2 times, respectively, to further boost their growth and contributions to exports.

Focus on Agriculture and Farmers
To support farmers, the government introduced the “PM Dhan Dhanya Krishi Yojana,” aimed at improving productivity in 100 districts with low crop intensity. Additionally, the Kisan Credit Card (KCC) scheme’s interest subvention limit has been raised from Rs 3 lakh to Rs 5 lakh.

Initiatives for Women, Youth, and Rural Development
The budget focuses on empowering women and youth through various schemes, including setting up 50,000 Atal Tinkering Labs in schools over the next five years. A special focus on the development of Bihar includes the expansion of IIT Patna and Patna Airport, along with the establishment of a Makhana board to support local farmers.

Taxation and Ease of Doing Business
Sitharaman also emphasized simplifying the tax system with the introduction of a new income tax bill next week. The government will establish a committee to review reforms to enhance ease of doing business, alongside a new policy for the leather and footwear sectors. The FM also announced that 36 new lifesaving drugs would be exempted from Basic Customs Duty.

Boosting Technology and Infrastructure
The government will set up three centres of excellence for artificial intelligence with a planned outlay of Rs 500 crore, alongside five national centres of excellence for skilling. Additionally, broadband connectivity will be expanded to all government secondary schools and primary healthcare centres.

Promoting Medical Tourism and FDI
In a push to promote medical tourism, easier visa norms will be introduced. The Foreign Direct Investment (FDI) limit in the insurance sector will also be increased to 100% from the previous 74%, aiming to enhance the industry’s growth.

Focus on Green and Clean Tech
The budget also includes initiatives to support clean technology manufacturing, including the production of electric vehicle (EV) batteries and solar panels. The exemption of customs duty on critical minerals required for EV battery manufacturing is expected to bolster the sector’s growth.

Debt Management and Fiscal Deficit
Sitharaman outlined that the government is focused on reducing its debt every year, with a revised fiscal deficit estimate of 4.8% for FY25. The gross and net borrowing for FY26 is projected to be Rs 14.82 lakh crore and Rs 11.54 lakh crore, respectively.

New Infrastructure and Tourism Initiatives
The government will develop the top 50 tourist sites in partnership with state governments, and new Greenfield airports will be set up in Bihar.

With a focus on both economic growth and social welfare, Budget 2025 sets the stage for transformative reforms across sectors, from taxation to healthcare, and from agriculture to technology, all aimed at empowering the citizens and boosting India’s global competitiveness.