Union Budget 2025 – GD/WAT Topic
India Budget 2025 – Key Highlights and Analysis
The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, sets a strategic roadmap for India’s economic growth. With a focus on tax reforms, capital expenditure, employment generation, and infrastructure development, the budget aims to accelerate India’s journey towards becoming a developed nation (Viksit Bharat).
This article covers the major announcements, including new tax updates, job creation schemes, infrastructure spending, and industry-specific initiatives.
1. New Tax Updates: Relief for Middle-Class Taxpayers
One of the most significant highlights of Budget 2025 is the revision in income tax slabs under the new tax regime. As per the new proposal:
- Income up to ₹12 lakh will be tax-free.
- Salaried individuals with standard deductions can avail tax exemptions up to ₹12.75 lakh.
- Revised tax rates aim to boost disposable income, increasing household spending, savings, and investments.
These changes are expected to provide relief to the middle class, thereby strengthening the economy through higher consumer demand.
2. Capital Expenditure (Capex) Growth
The budget increases India’s capital expenditure to ₹11.21 lakh crore, compared to ₹11.11 lakh crore in FY 2024-25. This rise in spending will support:
- Infrastructure development, including railways, highways, and smart cities.
- Public sector investments in healthcare, education, and urban development.
- Job creation in the manufacturing and construction sectors.
The enhanced Capex spending will play a crucial role in economic recovery, employment generation, and industrial growth.
3. Bihar Makhana Board: Boosting the Agricultural Sector
Recognizing Bihar’s potential in Makhana (fox nuts) production, the government announced the establishment of a Makhana Board in Bihar. The board will focus on:
- Enhancing Makhana production and processing.
- Value addition and improved marketing strategies.
- Organizing farmers into Farmer Producer Organizations (FPOs) for better profitability.
This initiative aligns with the government’s efforts to support agriculture, increase farmers’ income, and promote local industries.
4. Job Creation: 22 Lakh Jobs Under the Modi 3.0 Government
To address employment concerns, the government has introduced a job creation scheme aimed at generating 22 lakh jobs. The primary focus areas include:
- Footwear and leather industry – Modernization and enhanced production capacity.
- Manufacturing and MSMEs – Strengthening local industries and exports.
- Skill development programs – Training youth for employment-oriented sectors.
By focusing on employment-led development, the government aims to reduce unemployment rates and improve India’s workforce competitiveness.
5. UDAN Scheme Expansion: Improving Regional Air Connectivity
The government has revamped the UDAN (Ude Desh Ka Aam Nagrik) Scheme, which originally aimed at making air travel affordable for smaller cities. Under the new version:
- 120 new destinations will be added to India’s regional flight network.
- The target is to carry 4 crore passengers over the next 10 years.
- Improved accessibility to remote and underserved regions.
This move is expected to boost regional tourism, economic growth, and ease of travel for smaller towns.
6. Fiscal Deficit and Economic Stability
- The fiscal deficit is estimated at 4.4% of GDP for FY 2025-26.
- The government aims to keep borrowing in check while maintaining high-growth investments.
- Measures have been introduced to increase tax compliance, streamline financial regulations, and attract private investments.
These efforts ensure economic stability while continuing India’s long-term growth trajectory.
Conclusion: Balanced and Growth-Oriented Budget
The India Budget 2025 presents a progressive and inclusive financial strategy, emphasizing tax relief, infrastructure growth, employment generation, and industry support. With a focus on middle-class welfare, economic expansion, and rural development, this budget sets the foundation for a stronger, self-reliant India.
Union Budget 2024 vs Union Budget 2025
| Category | Union Budget 2024 | Union Budget 2025 |
|---|---|---|
| Presented By | Nirmala Sitharaman (Interim Budget) | Nirmala Sitharaman |
| Fiscal Deficit Target | 5.8% of GDP | 4.4% of GDP |
| Total Expenditure | ₹45.03 lakh crore | ₹50.65 lakh crore |
| Capital Expenditure | ₹11.11 lakh crore | ₹11.21 lakh crore |
| Tax-Free Income | ₹7 lakh under new tax regime | ₹12 lakh under new tax regime |
| Job Creation | Focus on skill development, rural employment | 22 lakh jobs targeted in manufacturing & MSMEs |
| Agriculture Support | ₹2.37 lakh crore allocated | Makhana Board for Bihar, National Seed Mission |
| UDAN Scheme | Expansion planned, limited new routes | 120 new destinations, 4 crore passengers target |
| Infrastructure Focus | ₹2.40 lakh crore for railways, highways expansion | Greenfield Airport in Bihar, Western Koshi Canal |
| MSME Support | Credit guarantee scheme for MSMEs | ₹10 lakh crore credit guarantee cover for MSMEs |
| Social Welfare | Increase in healthcare & education allocation | Enhanced Saksham Anganwadi & medical education |
| Investment Boost | ₹1.3 lakh crore interest-free loans to states | ₹1.5 lakh crore for infrastructure support to states |
| Pension & Savings | No major updates | Forum for pension sector reforms, Grameen Credit Score |
| Sector-Specific | Focus on green energy & electronics | Boost to textiles, leather, food processing, tourism |
| New Reforms | GST rationalization, import duty revisions | New Income Tax Bill, increased foreign investment in insurance |
- Fiscal Deficit Reduction: Budget 2025 focuses on fiscal consolidation, reducing the deficit from 5.8% to 4.4%.
- Tax Reforms: Higher tax exemption (₹12 lakh) in 2025 vs. ₹7 lakh in 2024.
- Job Creation & MSME Growth: 22 lakh jobs planned in 2025, along with increased credit support.
- Infrastructure & Aviation Growth: UDAN expansion and new Greenfield airports in 2025.
- Sectoral Focus: Agriculture, MSMEs, and tourism get a significant push in 2025.
Key Takeaways for Group Discussion (GD)
- Is the tax reform sufficient to boost economic activity?
- Will the increase in capital expenditure create sustainable jobs?
- How effective will the UDAN scheme expansion be in boosting regional tourism?
- Can the Bihar Makhana Board uplift agricultural production and rural livelihoods?
Participants in a group discussion on India Budget 2025 can leverage these points to evaluate its impact and effectiveness in driving economic growth.
