Union Budget 2025: Sitharaman's boost to agriculture, middle-class & MSMEs to boost economy | Key Highlights

New Delhi: Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26 on Saturday, outlining a comprehensive strategy aimed at boosting economic growth, strengthening infrastructure, and providing significant tax relief to the middle class. With a strong focus on democracy, demography, and demand, the Finance Minister said the budget seeks to propel India towards its vision of ‘Viksit Bharat’.

Boost for agriculture and rural economy
The government has launched the National Mission on High-Yielding Seeds to improve crop resilience and productivity. The Prime Minister Dhan-Dhaanya Krishi Yojana will develop 100 agricultural districts, benefiting 1.7 crore farmers. Additionally, a Makhana Board will be set up in Bihar to support production and value addition.

To further empower farmers, the Kisan Credit Card (KCC) scheme will provide enhanced credit support for 7.7 crore farmers, including those in fisheries and dairy sectors. The government has also introduced a six-year mission to increase pulse production with a focus on climate-resilient varieties.

MSMEs and entrepreneurship support
In a bid to bolster small businesses, the budget introduces customised Credit Cards for Micro Enterprises with a Rs 5 lakh limit. Additionally, a new scheme will provide loans of up to Rs 2 crore to five lakh first-time entrepreneurs over the next five years. Special incentives have been announced for labour-intensive industries, including footwear, leather, and toy manufacturing.

Infrastructure and urban development
With an outlay of Rs 1 lakh crore, urban growth initiatives like ‘Cities as Growth Hubs’ will be implemented. The Jal Jeevan Mission has been extended till 2028 to achieve 100% water coverage. A Rs 10 lakh crore Asset Monetisation Plan aims to reinvest funds into new projects. Additionally, Rs 1.5 lakh crore in interest-free loans will be provided to states for infrastructure development.

Education and healthcare expansion
The budget earmarks funds for 50,000 new Atal Tinkering Labs in government schools, broadband connectivity for rural schools, and the establishment of five National Centres of Excellence for skilling. Medical education will see an expansion with 10,000 new seats, aiming for a total of 75,000 over five years. Day Care Cancer Centres will also be set up in all district hospitals.

Taxation relief for middle class
A major highlight is the increased income tax exemption limit. Under the new tax regime, individuals earning up to Rs 12 lakh will not have to pay any tax, with a limit of Rs 12.75 lakh for salaried taxpayers after standard deductions. The revised tax slabs include:

•  Rs 4-8 lakh: 5%
• Rs 8-12 lakh: 12%
•  Rs 12-16 lakh: 15%
•  Rs 16-20 lakh: 20%
•  Rs 20-24 lakh: 25%
•  Above Rs 24 lakh: 30%

This move is expected to cost the exchequer Rs 1 lakh crore in direct tax revenue and Rs 2,600 crore in indirect taxes, but is anticipated to boost consumption and savings.

Investment and financial reforms
The Maritime Development Fund, with a corpus of Rs 25,000 crore, will support long-term financing for ports and logistics. The government will also expand the UDAN scheme to connect 120 new destinations and carry four crore passengers over the next decade. Additionally, the FDI limit in the insurance sector has been raised from 74% to 100%.

Export and trade promotion
To facilitate trade, BharatTradeNet, a digital public infrastructure platform, will be launched for seamless trade documentation and financing. Efforts will be made to integrate Indian MSMEs into global supply chains and ease trade barriers through the National Framework for Global Capability Centres.

The budget comes at a crucial time, with India's GDP growth projected to slow to 6.4 per cent in the current financial year, its lowest in four years. The recently tabled Economic Survey 2024-25 estimates GDP growth in the range of 6.3-6.8 per cent for 2025-26, highlighting the need for structural reforms in land and labour markets to achieve the government's Viksit Bharat 2047 vision.

As the country grapples with high prices and stagnant wages, the budget was expected to include measures to stimulate economic activity while maintaining fiscal prudence.