New Delhi

Presenting the Budget 2025 in Parliament, Finance Minister Nirmala Sitharaman outlined key focus areas: accelerating growth, ensuring inclusive development, boosting private sector investment, increasing household spending, and enhancing the purchasing power of India's growing middle class. The Budget emphasized four critical engines of growth: agriculture, MSMEs, investment, and exports. According to the Finance Minister, India is the fastest-growing economy among major global economies, and confidence in the nation's potential has strengthened. She added that the Budget would focus on developing clusters, skills, and the manufacturing ecosystem.

Here are some of the key highlights of this year’s Budget announcements:

Capex Update: The Capex for FY25 has been revised to Rs 10.18 trillion, with the fiscal deficit now projected at 4.8%. The fiscal deficit target for FY26 is set at 4.4%. Additionally, an outlay of Rs 1.5 trillion has been allocated for 50-year interest-free loans to states for infrastructure enhancement. Capex expenditure of Rs 11.21 trillion (3.1 per cent of GDP) earmarked in FY2025-26.

Defence: The defence budget has been increased by Rs 369.59 billion, raising it from Rs 4.54 trillion to Rs 4.91 trillion.

MSMEs: MSMEs, which contribute significantly to "Make in India," account for 45% of exports and employ 7.5 crore workers. To improve access to capital, the Budget proposes the introduction of customized credit cards for MSMEs, a fund of funds (FoF) for startups, and a new expanded FoF. Additionally, the classification criteria for MSMEs will be revised. The Finance Minister announced that the investment and turnover limits for MSMEs will be increased by 2.5 and 2 times, respectively, to help them scale up, improve technological capabilities, and create more job opportunities for youth.

Rationalization of Customs: The government will simplify customs tariffs by removing seven tariff rates, leaving only eight, including a zero rate. For marine products, the Budget has reduced Basic Customs Duty (BCD) on frozen fish paste from 30% to 5% and on fish hydrolycates from 15% to 5%. The customs duty on 36 life-saving medicines has been fully exempted. Products such as cobalt, LED, zinc, lithium-ion battery scrap, and 12 critical minerals are also exempted from BCD. The exemption on customs duty for raw materials and components used in ship manufacturing will continue for another 10 years.

Customs Duty Increase: In textiles, duties on knitted fabrics have been increased from 10% to 20%, or Rs 115 per kg, whichever is higher. In electronics, duties on interactive flat panel displays have been raised from 10% to 20%.

Textiles: A 5-year mission to boost cotton production has been announced.

Bharat Trade Net for International Trade: The government will establish Bharat Trade Net to enhance international trade, alongside upgrading air cargo warehousing for high-value perishable horticulture items.

50,000 ATAL Tinkering Labs: The Budget announces the establishment of 50,000 additional Atal Tinkering Labs (ATLs) and Centres of Excellence (CoEs) for AI in education, with an outlay of Rs 500 crore. These labs aim to foster curiosity, innovation, and scientific temper among youth.

New Fund of Funds for Startups: A new Fund of Funds (FoF) for startups will be established with a fresh contribution of Rs 100 billion, complementing the existing government investment of Rs 100 billion. The initial FoF of Rs 100 billion catalysed investments worth Rs 910 billion, and the additional funds are expected to attract Rs 1 to Rs 1.5 trillion in capital.

Deep Tech Fund of Funds: The Centre will provide 10,000 fellowships for tech research at IITs and IISc over the next five years, and a gene bank will be established to secure food security.

Construction: The Finance Minister announced that 40,000 affordable housing units will be completed in FY26.

Direct Taxes: The Budget proposes changes in income tax slabs and rates. It will allow taxpayers to claim the annual value of two self-occupied properties as nil. No income tax will be payable for incomes up to Rs 1.2 million.