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Key Announcements in Union Budget 2025-26: Impact & Analysis

Boosting Middle-Class Consumption & Savings

The government has exempted income tax for individuals earning up to ₹1 lakh per month (₹12.75 lakh annually under the new tax regime). This move aims to boost household savings, increase disposable income, and drive consumption, ultimately fueling economic growth.

Strengthening India’s Economic Growth Pillars

The budget identifies four key drivers of development—Agriculture, MSMEs, Investments, and Exports—and provides financial and policy support to accelerate industrial expansion and job creation.

Agriculture & Rural Development

PM Dhan-Dhaanya Yojana will cover 100 districts with low agricultural productivity, benefiting 1.7 crore farmers through better infrastructure and modern farming techniques.

Mission for Aatmanirbharta in Pulses focuses on boosting domestic production of tur, urad, and masoor dal to reduce dependence on imports.

Farmers can now avail loans of up to ₹5 lakh under the Modified Interest Subvention Scheme via Kisan Credit Cards (KCC), ensuring better access to credit at lower interest rates.

Fiscal Responsibility & MSME Support

The fiscal deficit for FY25 is set at 4.8%, with a plan to lower it to 4.4% in FY26 to maintain economic stability.

MSMEs will get enhanced credit guarantees, increasing the coverage from ₹5 crore to ₹10 crore to encourage small business growth.

A National Manufacturing Mission will support small, medium, and large industries, furthering the “Make in India” initiative to promote local production.

Education & Technology Innovations

50,000 Atal Tinkering Labs will be established in government schools over the next five years to encourage STEM education.

A Centre of Excellence in AI for Education will be set up with a ₹500 crore budget to drive technology-based learning.

Financial Inclusion & Digital Economy

The PM SVANidhi scheme will offer higher bank loans, while small vendors can access UPI-linked credit cards with a ₹30,000 limit.

Gig workers will receive identity cards, be registered on the e-Shram portal, and get healthcare coverage under PM Jan Arogya Yojana.

Urban Development & Infrastructure

A ₹1 Lakh Crore Urban Challenge Fund will help cities become economic growth hubs while ensuring sustainable urban expansion.

The Modified UDAN Scheme will improve regional air connectivity with 120 new destinations.

A ₹15,000 crore SWAMIH Fund will be allocated for completing 1 lakh stalled housing projects, benefiting the real estate sector.

Research, Innovation & Industry Growth

₹20,000 crore allocated for private sector-driven R&D and innovation initiatives.

A Nuclear Energy Mission with a ₹20,000 crore budget will focus on small modular reactor development and research.

FDI limits in the insurance sector have been raised from 74% to 100%, making it more attractive for foreign investors.

Simplifying Business & Taxation

The Jan Vishwas Bill 2.0 will decriminalize over 100 provisions across different laws, making compliance easier.

The time limit for filing updated income tax returns has been extended from 2 years to 4 years, giving taxpayers more flexibility.

Delay in TCS payment will no longer be a criminal offense, reducing penalties for businesses.

TDS on rent has increased from ₹2.4 lakh to ₹6 lakh, benefiting landlords and rental markets.

Healthcare & Customs Duty Reforms

Basic Customs Duty (BCD) has been exempted on 36 life-saving drugs, including those for cancer, rare diseases, and chronic illnesses.

The duty on Intelligent Flat Panel Displays (IFPD) has been raised to 20%, while the duty on open cells has been cut to 5% to boost local manufacturing.

To encourage EV and mobile battery production, capital goods for battery manufacturing are now exempt from customs duty.

The shipbuilding industry will enjoy a 10-year customs duty exemption on raw materials and components.

Agriculture & Fisheries Support

BCD on frozen fish paste has been reduced from 30% to 5%, while the duty on fish hydrolysate has dropped from 15% to 5%, supporting the seafood industry.