CMA Hrishikesh R Nampoothiri
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The Economic Survey of India for 2024-25, presented on January 31, 2025, by Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, highlighted that despite global uncertainties, India has maintained steady economic growth. The survey emphasized that the most effective policies for both Union and State governments are those that return time and mental bandwidth to entrepreneurs and households. This calls for significantly rolling back regulations, moving away from micromanagement of economic activities, and adopting risk-based regulations. The guiding principle should shift from 'guilty until proven innocent' to 'innocent until proven guilty.'
Understanding the economic condition and potential of the country, the Union Finance Minister presented the Union Budget 2025 on February 1, 2025, with the motto: "A country is not just its soil, a country is its people." This marks the eighth consecutive budget presented by Smt. Nirmala Sitharaman. The budget identifies four key engines of development—Agriculture, MSMEs, Investment, and Export—to achieve the vision of Viksit Bharat, with inclusiveness and reforms as its core principles.
Agriculture, the backbone of the economy, directly and indirectly employs over 75% of the workforce. The budget introduced several initiatives, including the newly launched Prime Minister Dhan-Dhaanya Krishi Yojna, which aims to support 1.7 crore farmers by transforming 100 low-productivity districts into agricultural hubs. Additionally, the credit limit for Kisan Credit Cards has been increased from Rs. 3 lakh to Rs. 5 lakh.
Other key measures include:
A five-year mission for cotton productivity.
A National Mission on High-Yielding Seeds to develop and promote climate-resilient and pest-resistant crops.
A governing board for Makhana cultivation in Bihar.
Establishment of a 12.7 lakh metric ton urea plant in Assam.
A six-year mission for Aatmanirbharta in Pulses, focusing on Tur, Urad, and Masoor dal.
Transforming India Post into a catalyst for rural development.
MSMEs play a crucial role in India's economy, with over 1 crore registered units employing 7.5 crore people and contributing 36% to manufacturing and 45% to exports. To support this sector, the budget has:
Increased investment and turnover limits for MSME classification by 2.5 and 2 times, respectively.
Enhanced credit guarantee coverage for MSMEs.
Introduced customized credit cards with a Rs. 5 lakh limit for micro-enterprises registered on the Udyam portal.
Launched a new scheme providing term loans up to Rs. 2 crore for 5 lakh first-time entrepreneurs, including women, SCs, and STs.
Announced initiatives for the footwear, leather, and toy sectors.
Proposed setting up a National Institute of Food Technology in Bihar.
Investment is focused on three pillars—people, economy, and innovation. Key initiatives include:
Expansion of IITs and medical education, adding 10,000 new seats.
Establishing daycare cancer centers in all district hospitals.
Setting up 50,000 Atal Tinkering Labs in government schools over five years.
A Centre of Excellence in AI for education.
50-year interest-free loans to states for capital expenditure, with an outlay of Rs. 1.5 lakh crore.
MUDRA loans for homestays.
10,000 fellowships for technological research at IITs and IISc.
Establishing a second gene lab and launching a National Geospatial Mission.
To enhance international trade competitiveness, the government has proposed:
Setting up BharatTradeNet (BTN), a digital public infrastructure for trade documentation and financing solutions.
Launching an export promotion mission with sector-specific targets.
Facilitating easy access to export credit and cross-border factoring support.
Providing MSME assistance to tackle non-tariff barriers in overseas markets.
Reforms are the key drivers for India's developmental goals. The budget introduces:
Increasing FDI limits in the insurance sector from 74% to 100%.
Streamlining approval processes for company mergers.
Rolling out a revamped central KYC registry.
Introducing a new Income Tax Bill.
Setting up a high-level committee for regulatory reforms.
Developing an Investment Friendliness Index for states.
Rationalizing customs tariffs for industrial goods.
Quoting Thirukkural, "Just as living beings live expecting rains, citizens live expecting good governance," the Union Budget 2025 resonated with taxpayers by announcing zero income tax for incomes up to Rs. 12 lakh (Rs. 12.75 lakh for salaried individuals). This revision, up from the previous Rs. 7 lakh bracket, puts Rs. 1 lakh crore back into the hands of citizens, boosting disposable income and economic growth.
Additional tax measures include:
Revised tax rate structure under the new regime.
Annual TDS limit on rent increased from Rs. 2.4 lakh to Rs. 6 lakh.
Doubled TDS limit for senior citizens.
Extended registration period for charitable trusts from 5 years to 10 years.
Claim eligibility for the annual value of two self-occupied properties.
Extended time to file updated tax returns from two years to four years.
The Union Budget 2025 is the first full-year budget of the third Modi Cabinet, sworn in with a historic mandate in 2024. It lays down a roadmap for India's vision of Viksit Bharat 2047, focusing on Gareeb (poor), Youth, Annadata (farmers), and Nari (women)—collectively called GYAN.
While the budget outlines ambitious reforms and policies, the real challenge lies in their effective implementation at both central and state levels. If executed well, these measures will drive economic development, financial stability, and regulatory efficiency. Let’s hope for a future where the reforms translate into tangible progress for India.
