SUKUMAR SAH
FACED with the formidable task of reigniting growth in a slowing economy while maintaining fiscal discipline, Finance Minister Nirmala Sitharaman has come out with flying colours. The Union Budget 2025-26 was presented to Parliament on February 1 in the backdrop of farmers looking for relief from mounting debts, businesses hoping for tax reforms to boost competitiveness, and the middle class awaiting measures to ease their financial burden. The Finance Minister zeroed in on all these demands with utmost alacrity.
Inclusive development
The overriding theme of the Budget 2025 is inclusive development and economic resilience, with a strong emphasis on empowering rural areas, supporting farmers, promoting MSMEs, enhancing healthcare and education access, boosting job creation, and strengthening infrastructure. In what could be considered a blueprint for achieving the Viksit Bharat @ 2047 vision of Prime Minister Narendra Modi, the Budget deftly aims to balance growth with fiscal prudence, focusing on equitable opportunities across regions and sectors while addressing the needs of the middle class and marginalised communities.
The Finance Minister has emphasised the need to accelerate growth, secure inclusive development, invigorate private sector investment, uplift household sentiment, and enhance spending power of India’s rising middle class.
Key initiatives Among the key initiatives highlighted by Sitharaman are the launch of the ‘Dhan Dhaniya Krishi Yojna’ to support 1.7 crore farmers across 100 low-productivity districts and generate rural employment, and enhanced investment and turnover limits for MSME classification will be enhanced to 2.5 and 2 times, respectively, to encourage growth and job creation. In the healthcare and education sectors, she announced that an additional 10,000 medical seats will be added next year, with a plan to increase by 75,000 seats over the next five years. Broadband connectivity will be expanded to all Government secondary schools and primary health centers in rural areas.
In a bid to boost infrastructure and connectivity, India Post will be transformed into a major public logistics organisation, leveraging its network to enhance rural logistics and development.
Relief to middle class
To give a fillip to industry and employment, the Finance Minister announced a dedicated scheme for the footwear and leather sector that is expected to generate employment for 22 lakh individuals, achieve revenue of Rs. 4 lakh crore, and boost exports to over Rs. 1.1 lakh crore.
The Budget 2025 offers significant relief to the middle class through measures aimed at easing their financial burden. The key benefits include adjustments to income tax slabs and increased standard deductions to boost disposable income. The most notable among these is the recognition that the middle class provides the sinews of strength to boost economic growth. Income of up to Rs 12 lakh will no longer be taxable.
The FM has proposed enhanced tax exemptions for investments in provident funds, insurance, and other long-term savings instruments; increased tax deductions on home loan interest payments, encouraging affordable housing; tax relief for health insurance premiums and preventive medical expenses; expansion of broadband connectivity to rural schools and health centers; and indirectly benefiting urban taxpayers by reducing the rural-urban divide. These measures are aimed at enhancing purchasing power, supporting wealth creation, and providing greater financial stability to middle-income groups.
