Budget 2025-26: A Vision for Viksit Bharat

The much-anticipated Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, lays out a roadmap for India's economic growth with a strong focus on agriculture, MSMEs, investment, and exports—the four engines driving India toward a developed future.

A Budget for Growth and Inclusivity

With the global economy facing uncertainties, India remains the fastest-growing major economy. This budget strengthens the government's commitment to inclusive development, private sector investments, and improving the financial well-being of households.

Key Budget Themes:

🔹 Economic Growth with Social Upliftment

🔹 Zero-Poverty and 100% School Education

🔹 Healthcare, Skilling, and Women’s Economic Participation

🔹 India as the Food Basket of the World

Major Announcements and Reforms

🚜 Agriculture & Rural Development

A landmark Prime Minister Dhan-Dhaanya Krishi Yojana will focus on enhancing agricultural productivity across 100 districts. Additional efforts include:

✅ Mission for Aatmanirbharta in Pulses – Self-sufficiency in pulses production

✅ National Mission on High Yielding Seeds – Advanced seed research for higher yields

✅ Makhana Board in Bihar – Boosting makhana production and exports

✅ Urea Plant in Assam – Strengthening fertilizer production

🏭 MSMEs: The Backbone of India’s Economy

MSMEs play a crucial role in employment and exports. The government has introduced:

✅ Revised MSME Classification – Investment and turnover limits raised

✅ Higher Credit Guarantee – From ₹5 crore to ₹10 crore for micro & small enterprises

✅ Startup Fund of Funds – ₹10,000 crore to boost innovation

✅ Focus on Footwear, Leather & Toy Sectors – Job creation and global competitiveness

💰 Investment in People & Innovation

India’s future hinges on a skilled workforce and innovation-driven growth:

✅ 50,000 Atal Tinkering Labs – Promoting STEM education in schools

✅ Broadband in Rural Schools & PHCs – Bridging the digital divide

✅ Centre of Excellence in AI for Education – Leveraging AI for learning

✅ 10,000 Additional Medical Seats – Strengthening healthcare education

⚡ Infrastructure & Energy Security

The budget places power and urban development at the core of growth:

✅ Nuclear Energy Mission for 100 GW by 2047 – Private sector participation

✅ Urban Challenge Fund of ₹1 Lakh Crore – Smart city development

✅ Public-Private Partnerships in Infrastructure – Strengthening connectivity

🌍 Boosting Exports & Global Trade

To establish India as a global manufacturing hub, the government will:

✅ Export Promotion Mission – Targeted sectoral support

✅ BharatTradeNet – A single digital platform for seamless trade

✅ Support for Global Supply Chain Integration – Expanding India’s industrial footprint

💸 Taxation & Fiscal Policies

Big relief for the middle class with a revised income tax structure:

✅ No tax on income up to ₹12 lakh

✅ Revised tax slabs for higher savings

✅ Simplification of GST and customs duty structures

A Future-Ready Budget

This reform-driven budget lays the foundation for India’s global competitiveness while ensuring the well-being of farmers, MSMEs, youth, and the middle class. With bold initiatives in technology, energy, infrastructure, and exports, India is well on its way to achieving Viksit Bharat by 2047.

Jai Hind! 🇮🇳

Expectations and wishlists from India Union Budget 2023.

1. Stimulus for economic recovery post-pandemic.
2. Increased spending on healthcare and education.
3. Tax reforms and simplification.
4. Boost for agriculture and rural development.
5. Measures to attract foreign investment.
6. Encouragement for entrepreneurship and job creation.
7. Infrastructural development and modernisation of cities.
8. Focus on environmental sustainability and clean energy.
9. Reforms in the banking and financial sector.
10. Increased allocation for social welfare programs.

 

Process of Preparing the Union Budget in India

The Union Budget of India is prepared by the Ministry of Finance, and presented by the Finance Minister in the Parliament on the last working day of February. The process of preparing the budget begins several months before the presentation date, with various government departments and agencies submitting their proposals for spending and revenue to the Ministry of Finance. These proposals are then reviewed and consolidated by the Ministry, and the final budget is presented to the Cabinet for approval before being presented to the Parliament. The budget includes estimates of government revenues and expenditures for the upcoming financial year, as well as proposals for taxes and other measures to achieve the government's economic and social objectives.

The process of preparing the Union Budget of India involves several steps:

1. The Ministry of Finance begins the budget-making process by issuing a budget circular, outlining the guidelines and instructions for the preparation of the budget.
2. Various government departments and ministries submit their budget estimates for the upcoming financial year to the Ministry of Finance.
3. The Ministry of Finance reviews and consolidates the budget estimates from all departments and ministries, and prepares a draft budget.
4. The draft budget is then presented to the Cabinet for review and approval.
5. After the Cabinet approves the budget, it is presented to the President of India, who then lays it before the Parliament.
6. The budget is then discussed and debated in both the Lok Sabha (House of the People) and Rajya Sabha (Council of States) before being passed.
7. Once the budget is passed, it is implemented on April 1, the beginning of the financial year in India.

Union Budget 2022 Highlights | All the action from FM Sitharaman’s announcements—as it happened

Last year’s budget had two engines of capital investments and reforms. This year’s budget has retained the focus on capital investments, but reforms have been replaced by a focus on domestic manufacturing. That may not be surprising because many of those reforms, such as the LIC divestment, identifying non-strategic companies and bank privatisation have no made much progress.

But, the Budget 2022-23 dashed expectations industry and investors had that it would spur consumption. FMCG industry data had pointed to a decline in rural consumption of essentials in the December quarter, partly due to higher prices but also reflecting income stress. But the finance minister did not announce any new schemes or enhance outlays of existing schemes that could have put more money in the hands of lower income consumers.

One reason for this approach could be to avoid doing anything that spurs inflation. In that respect, capital expenditure or increased domestic manufacturing are not pro-inflationary measures. In fact, more domestic manufacturing can create more supply that is good for lowering inflation. On the positive side, there were no new taxes or increase in taxes on individuals or companies. But the quest to support domestic manufacturing has meant higher customs duties, which will come out of the pockets of consumers eventually.

The total capital expenditure spent through the budget is projected to increase by 24.5 percent in 2022-23 but this picture changes when you consider the total capital expenditure—that is including resources of public enterprises. After doing that, the increase drops to 10.4 percent, which is good but not as aggressive as the budgetary number suggests. Even here, the revised estimate for FY22 for total capital expenditure came in a tad lower than the budgeted estimate. These investments are targeted in the infrastructure sector, with the PM GatiShakti umbrella scheme being the main driver encompassing sectors such as transport and utilities.

The government’s Atmanirbharta focus has been given a bigger push in the budget. One part of this is making it easier for businesses to operate, although these are governance measures that don’t really need to be in a budget. But measures such as supporting urban planning along with mass transit systems and setting up charging stations all result in domestic manufacturing opportunities. Similarly, the 5G rollout will be accompanied by a PLI scheme for domestic manufacturing. The budget proposes replacing the SEZ framework with a new framework that uses existing infrastructure. This theme runs through the budget in sectors such as defence and solar power.

But there is the problem of competitiveness of Indian industry against imports and that’s where the government has stepped in and taken several measures that will hike customs duty on several goods and also on project imports.

This marks a change in strategy as it was earlier considered that keeping duties on project imports low could help manufacturing industry become more competitive. But, now the government appears to have decided that it wants to encourage capital goods manufacturing also within the country. What this can do is increase the capital investment required to set up a project, which in turn could lead to higher production costs. This could work against the government’s intention of spurring industrial capex, however.

Both capex and a manufacturing renaissance will bring benefits over the longer run. In the near term, there remains the task of growth and balancing the budget. The government expects gross tax revenues to increase by 9.6 per during the year with contribution from both direct and indirect taxes—with the exception of excise duty where it has projected a decline. This seems achievable given FY22's performance despite Omicron's effect.

Since the increase in expenditure is more modest, the fiscal deficit is expected to decline by 50 basis points to 6.4 percent of GDP. While the bond market may have been upset as it has resulted in a higher gross market borrowing, the equity markets seem to have been happy with the budget. Maybe, they are looking at the brighter side, that it did no harm and that its support for domestic industry should see cyclicals benefit.