‘Structural reforms have led to global attention’
>>DIRECT TAX REFORMS PROPOSED
>>PRIORITISES TRADE FACILITATION
>>GST AMENDMENTS PROPOSED
New Delhi: Next five years is seen as a unique opportunity to realize ‘Sabka Vikas’, said the Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman while presenting the Union Budget 2025-26 in Parliament today.
In her budget speech, the Union Finance Minister emphasized on stimulating balanced growth of all regions.
The Minister highlighted that our economy is the fastest-growing among all major global economies. Our development track record of the past 10 years and structural reforms have drawn global attention.
Confidence in India’s capability and potential has only grown in this period, the Minister added.
A slew of Direct Tax reforms were proposed in the document with the aim to achieve good governance for the people and economy.
The objectives of the Direct Tax proposals are as follows:
Personal Income Tax reforms with special focus on Middle Class: No income tax payable upto total income of Rs. 12 lakh (i.e. average income of Rs.1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs.12.75 lakh for salaried tax payers, due to standard deduction of Rs. 75,000.
Rationalization of TDS/TCS for easing difficulties: The limit for tax deduction on interest for senior citizens is proposed to be doubled from the present Rs. 50,000 to Rs. 1 lakh. Similarly, the proposals include annual limit of Rs. 2.40 lakh for TDS on rent to be increased to Rs.6 lakh. This will reduce the number of transactions liable to TDS, thus benefitting small tax payers receiving small payments. The provisions of the higher TDS deduction will now apply only in non-PAN cases. Further, the threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) is proposed to be increased from Rs.7 lakh to Rs.10 lakh. Also, the delay for payment of TCS up to the due date of filing statement is proposed to be decriminalized.
Encouraging Voluntary Compliance: Proposal to extend the time-limit to file updated income tax returns for any assessment year, from the current limit of two years, to four years. It is further proposed to bring amendment in the Act to obligate furnishing of information in respect of crypto-asset transaction, in a statement as prescribed. It has also been proposed to align the definition of virtual digital asset accordingly.
Reducing Compliance Burden: Proposal to reduce the compliance burden for small charitable trusts/institutions by increasing their period of registration from 5 years to 10 years. Further, proposal to allow the benefit of claiming the annual value of two self-occupied properties as Nil, without any condition. The Budget also proposes that no tax will be collected at source on sale of specified goods of value of more than fifty lakhs.
Ease of Doing Business: Scheme proposed for determining arm’s length price of international transaction for a block period of three years, to streamline the process of transfer pricing and to provide an alternative to yearly examination, in line with global best practices. With a view to reduce litigation and provide certainty in international taxation, the scope of safe harbour rules is being expanded. Parity has been proposed in rates of long term capital gain tax on transfer of securities by non-resident. Further, a proposal has been made to exempt withdrawals made from National Savings Scheme accounts by individuals on or after the 29th August, 2024, while also proposing to allow similar treatment to NPS Vatsalya accounts, subject to overall limits.
Employment and Investment:
Tax certainty for Electronics Manufacturing Schemes: Proposal to provide a presumptive taxation regime for non-residents who provide services to a resident company that is establishing or operating an electronics manufacturing facility. Further, a proposal to introduce a safe harbour for tax certainty for non-residents who store components for supply to specified electronics manufacturing units.
Tonnage Tax Scheme for Inland Vessels: The benefits of existing tonnage tax scheme proposed to be extended to inland vessels registered under the Indian Vessels Act, 2021, to promote inland water transport in the country.
Extension for incorporation of Start-Ups: To support the Indian start-up eco-system, proposal to extend the period of incorporation by 5 years, to allow the benefit available to start-ups that are incorporated before 01.04.2030.
International Financial Services Centre (IFSC): In order to attract and promote additional activities in the IFSC, the Budget proposed specific benefits to ship-leasing units, insurance offices and treasury centers of global companies that are set up in IFSC. Further, to claim benefits, the cut-off date for commencement in IFSC has also been extended by five years to 31.03.2030.
Alternate Investment Funds (AIFs): Proposal to provide certainty of taxation to Category I and category II AIFs, which are undertaking investments in infrastructure and other such sectors, on the gains from securities.
Extension of investment date for Sovereign and Pension Funds: Proposal to extend the date of making an investment by five more years, to 31.03.2030, to promote funding from Sovereign Wealth Funds and Pension Funds to the infrastructure sector.
As a result of these proposals, revenue of about Rs.1 lakh crore in direct taxes will be forgone, the Finance Minister informed concluding her Budget speech.
Prioritises Trade Facilitation: GST Amendments Proposed
The Union Budget 2025-26 was tabled by the Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman in the Parliament today. The Budget proposes changes in GST laws for ensuring trade facilitation.
These proposed amendments include: Provision for distribution of input tax credit by Input Service Distributor in respect of inter-state supplies on which tax has to be paid on reverse charge basis, with effect from 1st April, 2025.
A new clause to provide definition of Unique Identification Marking for implementation of Track and Trace Mechanism.
Provision for reversal of corresponding input tax credit required in respect of a credit-note, if availed, for the purpose of reduction of tax liability of the supplier.
10% mandatory pre-deposit of penalty amount for appeals before Appellate Authority in cases involving only demand of penalty without any demand for tax.
Provision for penalties for contraventions of provisions related to the Track and Trace Mechanism.
Provision in Schedule III of the CGST Act, 2017 stating that the supply of goods warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to any person before clearance for exports or to the Domestic Tariff Area shall be treated neither as supply of goods nor as supply of services. Also no refund of tax already paid will be available for such transactions. This will be applicable with effect from 01.7.2017.
Inclusion of definitions of ‘Local Fund’ and ‘Municipal Fund’ used in the definition of “local authority”.
Certain conditions and restriction for filing of return to be included.
These changes will be brought into effect from a date to be notified in coordination with States, as per recommendations of the GST council, states the budget.
Agriculture First Engine For India’s Development Journey
Emphasizing ‘Agriculture as the first engine’ for India’s development journey, Union Budget 2025-26 tabled in Parliament today by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, announced a slew of measures to spur Agricultural Growth and Productivity, thereby benefitting the Annadata.
Announcing the Government’s decision to establish a Makhana Board in Bihar, Smt. Sitharaman said it will improve production, processing, value addition, and marketing of makhana as well as support the people engaged in these activities to be organized into Farmer Producer Organizations (FPOs). She added that the Board will provide handholding and training support to makhana farmers and also work to ensure they receive the benefits of all relevant Government schemes.
The Minister stated that a National Mission on High Yielding Seeds will be launched with an aim to strengthen the research ecosystem, targeted development and propagation of seeds with high yield, pest resistance and climate resilience, and commercial availability of more than 100 seed varieties released since July 2024.
To provide conservation support to both public and private sectors for genetic resources and ensure future food and nutritional security, the Minister said that the second Gene Bank with 10 lakh germplasm lines will be set up.
Announcing the ‘Mission for Cotton Productivity’, Sitharaman highlighted that the five-year mission will facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties. She said the mission will benefit lakhs of cotton growing farmers as the best of science & technology support will be provided to farmers. Aligned with the Government’s integrated 5F vision for the textile sector, the Minister remarked that the mission will help in increasing incomes of the farmers as well as ensure a steady supply of quality cotton for rejuvenating India’s traditional textile sector.
Noting the importance of Kisan Credit Cards (KCC) in facilitating short term loans for around 7.7 crore farmers, fishermen, and dairy farmers, the Minister announced the enhancement of loan limit under the Modified Interest Subvention Scheme from Rs. 3 lakh to Rs. 5 lakh for loans taken through the KCC.
Sitharaman announced the setting up of Urea plant with annual capacity of 12.7 lakh metric tons at Namrup, Assam. This, she said will further augment urea supply and help to achieve Atmanirbharta in urea production, along with the recently reopened three dormant urea plants in the Eastern region.
Highlighting that India ranks second-largest globally in fish production and aquaculture with the Seafood exports valued at Rs. 60 thousand crore, the Union Minister remarked that the Government will bring in an enabling framework for sustainable harnessing of fisheries from Indian Exclusive Economic Zone and High Seas, with a special focus on the Andaman & Nicobar and Lakshadweep Islands, which will unlock the untapped potential of the marine sector.
PMDDKY To Be Launched In 100 Low Crop Productivity Districts
Spurring agricultural growth and productivity is one of the development measures proposed in the Union Budget 2025-26. Agriculture is one of the four powerful engines amongst MSME, Investment and Exports, stated Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2025-26, in the Parliament today.
Specific proposals proposed in the Union Budget to strengthen productivity and resilience in agriculture are as follows:
Prime Minister Dhan-Dhaanya Krishi Yojana-Developing Agri Districts Programme:
The Union Finance Minister stated that motivated by the success of the Aspirational Districts Programme, the Government will undertake a ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states. Through the convergence of existing schemes and specialized measures, the programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters. The programme aims to enhance agricultural productivity; adopt crop diversification and sustainable agriculture practices; augment post-harvest storage at the panchayat and block level; improve irrigation facilities and facilitate availability of long-term and short-term credit. This programme is likely to help 1.7 crore farmers.
Building Rural Prosperity and Resilience:
A comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme will be launched in partnership with states, added the Union Finance Minister. This will address under-employment in agriculture through skilling, investment, technology, and invigorating the rural economy. The goal is to generate ample opportunities in rural areas so that migration is an option, but not a necessity. She further added that the programme will focus on rural women, young farmers, rural youth, marginal and small farmers, and landless families. The programme aims in catalyzing enterprise development, employment and financial independence for rural women; accelerating creation of new employment and businesses for young farmers and rural youth; nurturing and modernizing agriculture for productivity improvement and warehousing, especially for marginal and small farmers and diversifying opportunities for landless families. The Union Finance Minister further highlighted that the global and domestic best practices will be incorporated and appropriate technical and financial assistance will be sought from multilateral development banks. In Phase-1, 100 developing agri-districts will be covered.
Aatmanirbharta in Pulses:
Nirmala Sitharaman highlighted that the Government is implementing the National Mission for Edible Oilseed for achieving atmanirbhrata in edible oils. The Government made concerted efforts and succeeded in achieving near self-sufficiency in pulses. Farmers responded to the need by increasing the cultivated area by 50 per cent and Government arranged for procurement and remunerative prices. Since then, with rising incomes and better affordability, consumption of pulses has increased significantly. She further emphasized that the Government will launch a 6-year “Mission for Aatmanirbharta in Pulses” with a special focus on Tur, Urad and Masoor. The Mission will place emphasis on development and commercial availability of climate resilient seeds; enhancing protein content; increasing productivity; improving post-harvest storage and management and assuring remunerative prices to the farmers. Central agencies (NAFED and NCCF) will be ready to procure these 3 pulses, as much as offered during the next 4 years from farmers who register with these agencies and enter into agreements.
Comprehensive Programme for Vegetables & Fruits:
The Union Finance Minister said that it is encouraging that people are increasingly becoming aware of their nutritional needs. It is a sign of a society becoming healthier. With rising income levels, the consumption of vegetables, fruits and Shree-Anna is increasing significantly. A comprehensive programme to promote production, efficient supplies, processing, and remunerative prices for farmers will be launched in partnership with states. She further added that appropriate institutional mechanisms for implementation and participation of farmer producer organizations and cooperatives will be set up.
Grameen Credit Score:
The Union Finance Minister stated that Public Sector Banks will develop ‘Grameen Credit Score’ framework to serve the credit needs of SHG members and people in rural areas.
FDI Limit For Insurance Sector Raised to 100%
Budget 2025-26 aims to initiate transformative reforms across six domains which will augment our growth potential and global competitiveness during the next five years, the Union Finance & Corporate Affairs Minister said while presenting the Union Budget 2025-26 in the Parliament today.
One of these domains is Financial Sector which encompasses sectors like Insurance, Pensions, Bilateral Investment Treaties (BIT) and so forth.
FDI in Insurance Sector
Nirmala Sitharaman informed that the FDI limit for the insurance sector will be raised from 74 to 100 per cent. This enhanced limit will be available for those companies which invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified.
Pension Sector
A forum for regulatory coordination and development of pension products will be set up, the Union Finance Minister stated.
KYC Simplification
To implement the earlier announcement on simplifying the KYC process, the revamped Central KYC Registry will be rolled out in 2025, Smt. Nirmala Sitharaman said. A streamlined system for periodic updating will also be implemented.
Merger of Companies
The Union Finance Minister also said that requirements and procedures for speedy approval of company mergers will be rationalized. The scope for fast-track mergers will also be widened and the process will be made simpler.
Bilateral Investment Treaties
To encourage sustained foreign investment and in the spirit of ‘first develop India’, the current model BIT will be revamped and made more investor-friendly, the Union Finance Minister added.
“National Manufacturing Mission” To Cover Industries
A “National Manufacturing Mission” to cover small, medium and large industries for furthering “Make in India” was announced by the Union Minister for Finance and Corporate Affairs Nirmala Sitharaman while presenting the Union Budget 2025-26 in Parliament today. This will provide policy support, execution roadmaps, governance and monitoring framework for central ministries and states.
The National Manufacturing Mission will lay emphasis on five focal areas i.e. ease and cost of doing business; future ready workforce for in-demand jobs; a vibrant and dynamic MSME sector; availability of technology; and quality products.
The Mission will also support Clean Tech manufacturing and aims to improve domestic value addition and build the ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid scale batteries, the Union Finance Minister added.
The Finance Minister also outlined measures for Labour-Intensive Sectors, adding that Government will undertake specific policy and facilitation measures to promote employment and entrepreneurship opportunities in labour-intensive sectors.
The Union Minister specified that to enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The Union Finance Minister further informed that the scheme will support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of Rs. 4 lakh crore and exports of over Rs. 1.1 lakh crore.
The Union Minister further proposed National Action Plan for Toys to be implemented to make India a global hub for toys. The scheme will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys that will represent the ‘Made in India’ brand, the Minister added.
On the front of support for food processing, the Union Finance Minister reiterated Government’s commitment towards ‘Purvodaya’. The Union Minister proposed to establish a National Institute of Food Technology, Entrepreneurship and Management in Bihar. The institute will provide a strong fillip to food processing activities in the entire Eastern region. This will result in enhanced income for the farmers through value addition to their produce, and skilling, entrepreneurship and employment opportunities for the youth.
‘Bharattradenet’ For International Trade To Be Set-Up
In our journey of realizing ‘Sabka Vikas’ by stimulating balanced growth of all regions, Exports have been reckoned as one of the powerful engines of India’s growth story. The Union Budget 2025-26 tabled in Parliament by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, aims to initiate transformative reforms in domestic manufacturing and integrating India’s economy with global supply chains.
BharatTradeNet
A digital public infrastructure, ‘BharatTradeNet’ (BTN) for international trade has been proposed to be set-up as a unified platform for trade documentation and financing solutions. In the budget speech Smt. Sitharaman stated that, “BTN will complement the Unified Logistics Interface Platform and will be aligned with international practices”.
Integrating India’s Economy with Global Supply Chains
The Finance Minister announced in the Union Budget 2025-26 that support will be provided to develop domestic manufacturing capacities for integrating Indian economy with global supply chains. In this direction, the sectors will be identified based on an objective criteria.
It is also proposed that facilitation groups with participation of senior officers and industry representatives be formed for select products and supply chains.
Nirmala Sitharaman highlighted that the youth of India have both high skills and talent which are required for capitalizing on the opportunities related to Industry 4.0. “Our Government will support the domestic electronic equipment industry to leverage this opportunity for the benefit of the youth”, she added.
National Framework for GCC
It has been proposed in the Union Budget 2025-26 that a National Framework will be formulated as guidance to states for promoting Global Capability Centres in emerging tier 2 cities. This will suggest 16 measures for enhancing availability of talent and infrastructure, building-byelaw reforms, and mechanisms for collaboration with industry.
1 Lakh Crore Urban Challenge Fund To Implement ‘Cities As Growth Hubs’
Nirmala Sitharaman, while presenting the Budget 2025-2026 in the Parliament said that the Government will set up an Urban Challenge Fund of Rs 1 lakh crore to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’ announced in the July Budget.
She further added this fund will finance up to 25 per cent of the cost of bankable projects with a stipulation that at least 50 per cent of the cost is funded from bonds, bank loans, and PPPs. An allocation of Rs 10,000 crore is proposed for 2025-26.
The Budget has proposed that a National Geospatial Mission will be started to develop foundational geospatial infrastructure and data. Using PM Gati Shakti, this Mission will facilitate modernization of land records, urban planning, and design of infrastructure projects.
Sitharaman said that the Government has been giving priority to assisting urban poor and vulnerable groups. A scheme for socio-economic upliftment of urban workers will be implemented to help them improve their incomes, have sustainable livelihoods and a better quality of life.
Gig workers of online platforms provide great dynamism to the new-age services economy. Recognising their contribution, our Government will arrange for their identity cards and registration on the e-Shram portal. They will be provided healthcare under PM Jan Arogya Yojana. This measure is likely to assist nearly 1 crore gig-workers.
Finance Minister highlighted that the PM SVANidhi scheme has benefitted more than 68 lakh street vendors giving them respite from high-interest informal sector loans. Building on this success, the scheme will be revamped with enhanced loans from banks, UPI linked credit cards with ` 30,000 limit, and capacity building support.
She highlighted that Under the Special Window for Affordable and Mid-Income Housing (SWAMIH) fifty thousand dwelling units in stressed housing projects have been completed, and keys handed over to home-buyers. Another forty thousand units will be completed in 2025, further helping middle-class families who were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings.
Building on this success, SWAMIH Fund 2 will be established as a blended finance facility with contribution from the Government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another 1 lakh units.
Boost To Shipping And Aviation Sector
For long-term financing for the maritime industry, the Union Finance Minister Smt. Nirmala Sitharaman has proposed to set up a Maritime Development Fund with a corpus of Rs 25,000 crore. Announcing this in her budget speech in the Parliament today, the Union Minister for Finance & Corporate Affairs Nirmala Sitharaman said that this corpus will be for distributed support and promoting competition in the maritime industry. The fund will have up to 49 per cent contribution by the Government, and the balance will be mobilized from ports and private sector.
The Finance Minister stated that the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages, which will also include Credit Notes for shipbreaking in Indian yards to promote the circular economy. Further, the large ships above a specified size are also proposed to be included in the infrastructure harmonized master list (HML). The Union Budget also proposes to facilitate ‘Shipbuilding Clusters’ in order to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem. Acknowledging that the shipbuilding has a long gestation period, the Finance Minister proposed to continue the exemption of Basic Customs Duty on raw materials, components, consumables or parts for the manufacture of ships for another ten years. She further proposed the same dispensation for ship breaking to make it more competitive.
Praising the Regional Connectivity Scheme UDAN, Nirmala Sitharaman said in her speech that UDAN has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel. The scheme has connected 88 airports and operationalized 619 routes. Inspired by that success, a modified UDAN scheme which will be launched to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years and this scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts, stated the Finance Minister. She also informed the house that the government will facilitate upgradation of infrastructure and warehousing for air cargo including high value perishable horticulture produce. Cargo screening and customs protocols will also be streamlined and made user-friendly.
Giving infrastructure fillip to the state of Bihar, the Union Finance Minster proposed that the Greenfield airports will be facilitated in Bihar to meet the future needs of the State. These will be in addition to the expansion of the capacity of Patna airport and a brownfield airport at Bihta. Financial support will also be provided for the Western Koshi Canal ERM Project benefitting a large number of farmers cultivating over 50,000 hectares of land in the Mithilanchal region of Bihar.
50,000 ATLs In Govt Schools In Next 5 Years
While presenting the Union Budget 2025-26 in the Parliament, the Union Minister proposed various development measures for nurturing innovation.
The Union Finance Minister announced to set up Fifty thousand Atal Tinkering Labs in Government schools in next 5 years to cultivate the spirit of curiosity and innovation, and foster a scientific temper among young minds. The Union Budget also proposes to provide Broadband connectivity to all Government secondary schools and primary health centres in rural areas under the Bharatnet project.
On higher education, the Union Budget 2025-26 states that total number of students in 23 IITs has increased 100 per cent from 65,000 to 1.35 lakh in the past 10 years. Additional infrastructure will be created in the 5 IITs started after 2014 to facilitate education for 6,500 more students. Hostel and other infrastructure capacity at IIT, Patna will also be expanded.
With the aim to help students understand their subjects better, Nirmala Sitharaman has proposed to implement a Bharatiya Bhasha Pustak Scheme to provide digital-form Indian language books for school and higher education.
The Union Finance Minister also announced to set up five National Centres of Excellence for skilling with global expertise and partnerships to equip youth with the skills required for “Make for India, Make for the World” manufacturing. The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews.
The Union Budget also announced to set up a Centre of Excellence in Artificial Intelligence for education with a total outlay of Rs 500 crore.
While presenting the Budget, Nirmala Sitharaman announced to allocate Rs 20,000 crore to implement private sector driven Research, Development and Innovation. In the next five years, under the PM Research Fellowship scheme, provision of ten thousand fellowships for technological research in IITs and IISc with enhanced financial support is also proposed in the Budget.
200 Centres To Be Set Up In 2025-26
Investment is the 3rd engine of development encompassing investing in people, investing in the economy and investing in innovation, said the Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman while presenting the Union Budget 2025-26 in the Parliament.
As part of investing in people, the Union Budget 2025-26 proposes to enhance the cost norms for the nutritional support under Saksham Anganwadi and Poshan 2.0 programme. The programme provides nutritional support to more than 8 crore children, 1 crore pregnant women and lactating mothers all over the country, and about 20 lakh adolescent girls in aspirational districts and the north-east region.
The Union Finance Minister, in her Budget Speech, announced to facilitate setting up of Day Care Cancer Centres in all district hospitals in the next 3 years. 200 Centres will be established in 2025-26. The Budget also highlights that in the next year, 10,000 additional seats will be added in medical colleges and hospitals, towards the goal of adding 75,000 seats in the next 5 years.
The Finance Minister informed that the Medical Tourism and Heal in India will be promoted in partnership with the private sector along with capacity building and easier visa norms.
Relief on import of Drugs/Medicines
To provide relief to patients, particularly those suffering from cancer, rare diseases and other severe chronic diseases, the Union Finance Minister has proposed to add 36 lifesaving drugs and medicines to the list of medicines fully exempted from Basic Customs Duty (BCD).
The Finance Minister also proposed to add 6 lifesaving medicines to the list attracting concessional customs duty of 5%. Full exemption and concessional duty will also respectively apply on the bulk drugs for manufacture of the above.
The Budget also specified that drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from BCD, provided the medicines are supplied free of cost to patients. Budget proposes to add 37 more medicines along with 13 new patient assistance programmes.
Proposes Multi-Sectoral Reforms In Public Private Partnerships
As part of the 3rd engine of investment in economy, Union Minister for Finance proposed multi-sectoral reforms encompassing Public Private Partnerships, support to States, Asset Monetisation Plan for 2025-2030, mining sector, and support to domestic manufacturing, while presenting the Union Budget 2025-26 in Parliament, today.
Public Private Partnership in Infrastructure
Sitharaman proposed that each infrastructure-related ministry will come up with a 3-year pipeline of projects that can be implemented in PPP mode, and States will also be encouraged to initiate and seek support from the India Infrastructure Project Development Fund (IIPDF) scheme to prepare PPP proposals.
Support to States for Infrastructure
The Union Finance Minister proposed an outlay of ₹1.5 lakh crore for the 50-year interest free loans to states for capital expenditure and incentives for reforms.
Asset Monetisation Plan 2025-30
Building on the success of the first Asset Monetisation Plan announced in 2021, Smt. Sitharaman proposed to launch the Second Plan for 2025-30 to plough back capital of ₹10 lakh crore in new projects with fine-tuning of the regulatory and fiscal measures to support the Plan.
Mining Sector Reforms
The Union Finance Minister proposed mining sector reforms, including those for minor minerals, through sharing of best practices and institution of a State Mining Index.
PM Gati Shakti Data for Private Sector
Sitharaman proposed to provide access to relevant data and maps from the PM Gati Shakti portal for furthering PPPs and assisting the private sector in project planning.
Support to Domestic Manufacturing and Value addition Critical Minerals
The Union Finance Minister proposed to fully exempt cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals to secure their availability for manufacturing in India and promote more jobs for India’s youth.
HLC For Regulatory Reforms To Be Set Up
In her Budget speech, the Union Finance Minister said that the Government is determined to ensure that the regulations must keep up with technological innovations and global policy developments. A light-touch regulatory framework based on principles and trust will unleash productivity and employment. Through this framework, regulations will be updated that were made under old laws.
To develop this modern, flexible, people-friendly, and trust-based regulatory framework appropriate for the twenty-first century, Nirmala Sitharaman proposed four specific measures:
High Level Committee for Regulatory Reforms
A High-Level Committee for Regulatory Reforms will be set up for a review of all non-financial sector regulations, certifications, licenses, and permissions, the Union Finance Minister added.
The committee will be expected make recommendations within a year. The objective is to strengthen trust-based economic governance and take transformational measures to enhance ‘ease of doing business’, especially in matters of inspections and compliances. States will be encouraged to join in this endeavour.
Investment Friendliness Index of States
Nirmala Sitharaman added that an Investment Friendliness Index of States will be launched in 2025 to further the spirit of competitive cooperative federalism.
FSDC Mechanism
Under the Financial Stability and Development Council, a mechanism will be set up to evaluate impact of the current financial regulations and subsidiary instructions, the Union Finance Minister said. It will also formulate a framework to enhance their responsiveness and development of the financial sector.
Jan Vishwas Bill 2.0
Nirmala Sitharaman informed that the Government will now bring up the Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various laws. In the Jan Vishwas Act 2023, more than 180 legal provisions were decriminalized.
In the last ten years in several aspects, including financial and non-financial, our Government has demonstrated a steadfast commitment to ‘Ease of Doing Business’, the Union Finance Minister said.
Identifies Tourism as a Sector For Employment-Led Growth
Union Budget 2025-26 has identified tourism as a sector for employment-led growth. Presenting Budget in Parliament, Finance Minister Nirmala Sitharaman said that facilitating employment-led growth include organizing intensive skill-development programmes for youth including hospitality management, MUDRA loans for homestays, improving ease of travel and connectivity to tourist destinations, introducing streamlined e-visa facilities and providing performance-linked incentives to states.
She said that top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode. The Budget added that land for building key infrastructure including hotels will have to be provided by states and hotels in those destinations will be included in the infrastructure HML. Minister said that emphasis on places of spiritual and religious significance will be given and there will be a special focus on destinations related to the life and times of Lord Buddha. In her speech, Nirmala Sitharaman said that medical tourism and Heal in India will be promoted in partnership with the private sector along with capacity building and easier visa norms.
Gyan Bharatam Mission
Finance Minister said that documentation and conservation of our manuscript heritage with academic institutions, museums, libraries and private collectors will be undertaken to cover more than 1 crore manuscripts. She added that Government will set up a National Digital Repository of Indian knowledge systems for knowledge sharing.
Next 5 years present a unique opportunity to realize ‘sabka vikas’
Next five years is seen as a unique opportunity to realize ‘Sabka Vikas’, said the Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman while presenting the Union Budget 2025-26 in Parliament.
In her budget speech, the Union Finance Minister emphasized on stimulating balanced growth of all regions.
The Minister highlighted that our economy is the fastest-growing among all major global economies. Our development track record of the past 10 years and structural reforms have drawn global attention. Confidence in India’s capability and potential has only grown in this period, the Minister added.
The Union Budget 2025-26 highlights Government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance spending power of India’s rising middle class.
Specifying Agriculture, MSME, Investment, and Exports to be four powerful engines in journey of development, the Minister underlined that this budget aims to initiate transformative reforms across six domains. During the next five years, the domains of Taxation, Power Sector, Urban Development, Mining, Financial Sector and Regulatory Reforms will augment our growth potential and global competitiveness. The Finance Minister said that in the journey of development, “Our Reforms” is the fuel; where, “Inclusivity” is a guiding spirit; and the “Viksit Bharat” is the destination.
Focussing on Garib, Youth, Annadata and Nari in her Union Budget 2025-26 speech, the Union Finance Minister underscored on proposed development measures spanning ten broad areas. These are namely, Spurring Agricultural Growth and Productivity; Building Rural Prosperity and Resilience; Taking Everyone Together on an Inclusive Growth path; Boosting Manufacturing and Furthering Make in India; Supporting MSMEs; Enabling Employment-led Development; Investing in people, economy and innovation; Securing Energy Supplies; Promoting Exports; and Nurturing Innovation.
The Union Minister observed that “Viksit Bharat” encompasses zero-poverty; hundred per cent good quality school education; access to high-quality, affordable, and comprehensive healthcare; hundred per cent skilled labour with meaningful employment; seventy per cent women in economic activities; and farmers making our country the ‘food basket of the world’.
Budget Outlay For JJM to Rs 67,000 crore
While presenting the Union Budget 2025-26 in the Parliament, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said that the total budget outlay for Jal Jeevan Mission has been enhanced to Rs 67,000 Crore. She said that the Mission stands extended until 2028.
Nirmala Sitharaman stated that 15 crore households representing 80 per cent of India’s rural population have benefitted by the Jal Jeevan Mission since 2019. She added that access to potable tap water connections is provided under this Mission and in the next three years the target is to achieve 100 per cent coverage.
Jal Jeevan Mission’s focus will be on the quality of infrastructure and O&M of rural piped water supply schemes through “Jan Bhagidhari”. Separate MoUs will be signed with states/UTs, to ensure sustainability and citizen-centric water service delivery, informed Sitharaman.
Nuclear Energy Mission Will Be Set Up
Sitharaman said that a Nuclear Energy Mission for research & development of Small Modular Reactors (SMR) with an outlay of ` 20,000 crore will be set up. At least 5 indigenously developed SMRs will be operationalized by 2033, she informed.
Sitharaman highlighted that development of at least 100 GW of nuclear energy by 2047 is essential for our energy transition efforts. For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up.
The Budget also proposes that states will be incentivized for electricity distribution reforms and augmentation of intra-state transmission capacity. This will improve financial health and capacity of electricity companies. The Minister informed that additional borrowing of 0.5 per cent of GSDP will be allowed to states, contingent on these reforms.
India Post To Act As A Catalyst For Rural Economy
Nirmala Sitharaman said that India Post with 1.5 lakh rural post offices, complemented by the India Post Payment Bank and a vast network of 2.4 lakh Dak Sevaks, will be repositioned to act as a catalyst for the rural economy.
Finance Minister also proposed that the expanded range of services of India Post will include:
1) rural community hub co-location;
2) institutional account services;
3) DBT, cash out and EMI pick-up;
4) credit services to micro enterprises;
5) insurance; and
6) assisted digital services.
Sitharaman further added that India Post will also be transformed as a large public logistics organization. This will meet the rising needs of Viswakarmas, new entrepreneurs, women, self-help groups, MSMEs, and large business organizations.
Union Minister also said that the services of India Post Payment Bank will be deepened and expanded in rural areas.
Proposes To Remove 7 Customs Tariff Rates For Industrial Goods
The Union Budget 2025-26 presented by Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman in parliament today, focuses its customs proposals on rationalizing tariff structure and addressing duty inversion. The Minister said that the proposals will also support domestic manufacturing and value addition while promoting exports, facilitating trade and providing relief to common people.
Delivering on the promise to review customs rate structure announced in July 2024, the Budget proposes to remove seven customs tariff rates for industrial goods over and above the seven tariff rates removed in Budget 2023-24. This will leave only eight tariff rates, including ‘zero’ rate. The Budget also proposes to levy not more than one cess or surcharge. This will exempt Social Welfare Surcharge on 82 tariff lines that are subject to a cess.
Relief on import of Drugs/Medicines
In sector specific proposals, the Budget comes as a big relief to patients, particularly to those suffering from cancer, rare diseases and other severe chronic diseases. The Budget proposes to add 36 life saving drugs and medicines to the list of medicines fully exempted from Basic Customs Duty. The Budget also proposes to add 6 life saving medicines to the list attracting concessional customs duty of 5%. Full exemption and concessional duty will also respectively apply on the bulk drugs for manufacture of the above.
Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from Basic Customs Duty, provided the medicines are supplied free of cost to patients. The Budget proposes to add 37 more medicines along with 13 new patient assistance programmes to the list.
Support to Domestic Manufacturing and Value addition
The Budget proposes to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing to the list of exempted capital goods. “This will boost domestic manufacture of lithium-ion battery, both for mobile phones and electric vehicles”, FM stated in her speech.
The Budget also proposes to fully exempt Basic Customs Duty on cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. Finance Minister said that this will help secure their availability for manufacturing in India and promote more jobs for our youth. This is in addition to the 25 critical minerals fully exempted of BCD in July 2024 Budget.
To promote domestic production of technical textile products such as agro-textiles, medical textiles and geo textiles at competitive prices, the Budget proposes to add two more types of shuttle-less looms to the list of fully exempted textile machinery. “I also propose to revise the BCD rate on knitted fabrics covered by nine tariff lines from “10% or 20%” to “20% or Rs.115 per kg, whichever is higher”, said Finance Minister in her speech.
In line with the ‘Make in India’ policy, the Budget proposes to increase the BCD on Interactive Flat Panel Display (IFPD) from 10% to 20% and reduce the BCD to 5% on Open Cell and other components. The Minister informed that it will rectify the inverted duty structure.
Considering the long gestation period of shipbuilding, the Budget proposes to continue the exemption of BCD on raw materials, components, consumables or parts for the manufacture of ships for another ten years. The Budget also proposes the same dispensation for ship breaking to make it more competitive.
The Budget also proposes to reduce the BCD from 20% to 10% on Carrier Grade ethernet switches to make it at par with Non-Carrier Grade ethernet switches. Finance Minister said that that this will prevent classification disputes.
Export Promotion
The Budget also contains certain tax proposals to promote exports. To facilitate exports of handicrafts, it proposes to extend the time period for export from six months to one year, further extendable by another three months, if required. The Budget also proposes to add nine handicraft items to the list of duty-free inputs.
The Budget also proposes to exempt crust leather from 20% export duty to facilitate exports by small tanners, while fully exempting BCD on Wet Blue leather to facilitate imports for domestic value addition and employment.
To enhance India’s competitiveness in the global seafood market, the Budget proposes to reduce BCD from 30% to 5% on Frozen Fish Paste (Surimi) for manufacture and export of its analogue products. It also proposes to reduce BCD from 15% to 5% on fish hydrolysate for manufacture of fish and shrimp feeds.
To promote development of domestic MROs for aircraft and ships, the July 2024 Budget extended the time limit for export of foreign origin goods that were imported for repairs, from 6 months to one year and further extendable by one year. The Budget 2025-26 proposes to extend the same dispensation for railway goods.
Trade facilitation and Ease of Doing Business
Presently, the Customs Act, 1962 does not provide any time limit to finalize Provisional Assessments leading to uncertainty and cost to trade. As a measure of promoting ease of doing business, the Budget proposes to fix a time-limit of two years, extendable by a year, for finalizing the provisional assessment.
The Budget also proposes to introduce a new provision that will enable importers or exporters, after clearance of goods, to voluntarily declare material facts and pay duty with interest but without penalty. “This will incentivize voluntary compliance. However, this will not apply in cases where department has already initiated audit or investigation proceedings”, said Sitharaman.
The Budget proposes to extend the time limit for the end-use of imported inputs in the relevant rules, from six months to one year. This will not only allow industry to better plan their imports, but also provide operational flexibility in view of cost and uncertainty of supply. Further, such importers will now have to file only quarterly statements instead of a monthly statement.
