Summary and Analysis of Union Budget 2025-26
The Union Budget 2025-26, presented by Union Minister for Finance and Corporate Affairs Smt.Nirmala Sitharaman, is a comprehensive blueprint aimed at fostering sustainable economic growth, enhancing infrastructure, and improving the quality of life for all citizens. The budget is structured around four key engines of development: Agriculture, MSMEs, Investment, and Exports. Additionally, it introduces significant reforms in the financial sector and tax policies to simplify compliance, boost investment, and promote ease of doing business. Below is a detailed summary and analysis of the key highlights and initiatives announced in the budget.
1. Budget Estimates 2025-26
- Total Receipts (excluding borrowings): ₹34.96 lakh crore.
- Total Expenditure: ₹50.65 lakh crore.
- Net Tax Receipts: ₹28.37 lakh crore.
- Fiscal Deficit: 4.4% of GDP.
- Gross Market Borrowings: ₹14.82 lakh crore.
- Capital Expenditure (Capex): ₹11.21 lakh crore (3.1% of GDP).
Analysis:
✦ The budget emphasizes fiscal prudence while maintaining a focus on capital expenditure to drive infrastructure development and economic growth.
✦ The fiscal deficit target of 4.4% of GDP reflects a balanced approach to managing public finances without compromising on growth-oriented spending.
2. Agriculture as the First Engine of Development
✦ The budget places significant emphasis on agriculture, recognizing its critical role in India’s economy and rural livelihoods. Key initiatives include:
a. Prime Minister Dhan-Dhaanya Krishi Yojana:
✦ A program to develop 100 low-productivity agricultural districts, benefiting 1.7 crore farmers.
✦ Focus on improving crop intensity, credit access, and productivity.
b. Building Rural Prosperity and Resilience:
✦ A multi-sectoral program to address under-employment in agriculture through skilling, investment, and technology.
✦ Phase-1 to cover 100 developing agri-districts.
c. Aatmanirbharta in Pulses:
✦ A 6-year mission to achieve self-sufficiency in pulses like Tur, Urad, and Masoor.
✦ NAFED and NCCF to procure pulses from farmers over the next 4 years.
d. Comprehensive Programme for Vegetables & Fruits:
✦ Promotion of production, processing, and remunerative prices for farmers.
e. Makhana Board in Bihar:
✦ Establishment of a Makhana Board to enhance production, processing, and marketing of Makhana.
f. National Mission on High Yielding Seeds
✦ Aimed at developing and commercializing over 100 high-yield seed varieties.
g. Fisheries
✦ A framework for sustainable fisheries in the Indian Exclusive Economic Zone and High Seas, with a focus on Andaman & Nicobar and Lakshadweep Islands.
h. Mission for Cotton Productivity
✦ A 5-year mission to improve cotton productivity and promote extra-long staple cotton varieties.
i. Enhanced Credit through KCC
✦ Loan limit under the Modified Interest Subvention Scheme increased from 3 lakh to 5 lakh.
j. Urea Plant in Assam
✦ A new urea plant with an annual capacity of 12.7 lakh metric tons to be set up in Namrup, Assam.
Analysis:
✦ The agriculture-focused initiatives aim to address structural challenges in the sector, such as low productivity, under-employment, and lack of market access.
✦ By promoting self-sufficiency in pulses, high-yield seeds, and sustainable fisheries, the budget seeks to enhance food security and farmer incomes.
✦ The emphasis on rural prosperity and resilience underscores the government’s commitment to inclusive growth.
3. MSMEs as the Second Engine of Development
✦ Micro, Small, and Medium Enterprises (MSMEs) are recognized as a key driver of employment and economic growth. Key measures include:
a. Revision in Classification Criteria for MSMEs
✦ Investment and turnover limits for MSME classification increased by 2.5 and 2 times, respectively.
b. Credit Cards for Micro Enterprises
✦ Customized credit cards with a ₹15 lakh limit for micro-enterprises registered on the Udyam portal.
✦ 10 lakh cards to be issued in the first year.
c. Fund of Funds for Startups
✦ A new Fund of Funds with a ₹10,000 crore corpus to support startups.
d. Scheme for First-time Entrepreneurs
✦ Term loans of up to ₹2 crore for 5 lakh women, SC, and ST first-time entrepreneurs over the next 5 years.
e. Focus Product Scheme for Footwear & Leather Sectors
✦ Aims to generate employment for 22 lakh persons, turnover of ₹4 lakh crore, and exports of ₹1.1 lakh crore.
f. Measures for the Toy Sector
✦ A scheme to make India a global hub for high-quality, innovative, and sustainable toys.
g. Support for Food Processing
✦ Establishment of a National Institute of Food Technology, Entrepreneurship, and Management in Bihar.
h. Manufacturing Mission
✦ A National Manufacturing Mission to further the “Make in India” initiative.
Analysis:
✦ The budget provides a strong impetus to MSMEs by easing access to credit, expanding classification criteria, and promoting sector-specific growth.
✦ The focus on startups, first-time entrepreneurs, and sectors like footwear, leather, and toys aligns with the government’s vision of fostering innovation, employment, and exports.
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Ms. Subathra Mylsamy BA.MA.BL.LLM (UK)
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