The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, marks a significant step toward achieving the government’s vision of Viksit Bharat (Developed India) by 2047. With strong emphasis on inclusive growth, innovation, and sustainability, the budget introduces several strategic initiatives aimed at transforming key sectors of the economy.
Focus on Farmers: Boosting Agricultural Productivity
The budget places strong emphasis on agriculture, a sector employing nearly half of India's workforce. Under the Prime Minister Krishi Yojana, the government plans to launch an agricultural district program targeting 100 districts with low productivity, moderate crop intensity, and below-average credit parameters. This initiative aims to significantly boost agricultural productivity through crop diversification, sustainable farming practices, improved irrigation facilities, and enhanced post-harvest storage infrastructure. The program is anticipated to benefit 1.7 crore farmers, ensuring food security and increasing rural incomes.
Further, the budget expands the scope of the Kisan Credit Card (KCC) scheme to continue providing short-term loans to 7.7 crore farmers, fishermen, and dairy farmers. The loan limit under the modified interest subvention scheme has been raised from ₹3,000 to ₹5,000, offering greater financial support for agricultural production.
Focus on MSMEs: Empowering the Backbone of the Economy
Micro, Small, and Medium Enterprises (MSMEs) constitute the backbone of India’s economy, contributing 36% to manufacturing and 45% to exports. Recognizing their importance, the budget introduces measures to empower MSMEs by increasing the investment and turnover limits by 2.5 times and 2 times, respectively. This is expected to help these small businesses scale up, innovate, and generate more employment opportunities.
It also enhances the credit guarantee cover for micro and small enterprises, raising the guarantee limit from ₹5 crore to ₹10 crore. This move is expected to facilitate unlocking of ₹1.5 lakh crore globally over the next five years, providing much-needed financial backing to small businesses.
India’s Energy Transition: A Focus on Clean Energy
Aligning with India’s commitment to clean energy, the budget announces the introduction of a Nuclear Energy Mission to develop at least 100 GW of nuclear power by 2047. To facilitate private sector participation, amendments to the Atomic Energy Act will be introduced. A dedicated research and development initiative for Small Modular Reactors (SMRs) will also begin with an outlay of ₹20,000 crore, with the goal of operationalizing at least five indigenously developed SMRs by 2033.
Center of Excellence in AI for Education: Bridging the Digital Divide
The establishment of a Center of Excellence in Artificial Intelligence (AI) for Education, with an outlay of ₹500 crore, aims to leverage AI to improve the quality of education. This center will focus on developing AI-driven tools and platforms for personalized learning, teacher training, and curriculum development.
Anitha Sarathy, India Head of People & Culture at Encora, stated, “The announcement of three Centres of Excellence on AI for education with an outlay of ₹500 crore… is significant for India’s digital and economic transformation.”
Transforming India Post: Publicly Held Logistics Player
The budget also proposes to transform India Post, with its expansive network of rural facilities, to become a large public logistics organization. This initiative will support new entrepreneurs, especially from rural areas, and is expected to create employment opportunities, enhancing rural connectivity.
Promoting Competitive Cooperative Federalism
To promote competitive cooperative federalism, the budget introduces an Investment Friendliness Index for states, which assesses the ease of doing business and encourages state-level reforms.
Healthcare Allocations: Relief for Patients
The budget allocates ₹95,957.87 crore to the Ministry of Health and Family Welfare—a 10.8% increase from the previous fiscal year. This significant boost will aid the healthcare sector, especially post-pandemic and address the rising burden of non-communicable diseases.
Noteworthy increases include funding for the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission, which has received increased allocations aimed at establishing new healthcare facilities, and the Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana intended to extend healthcare coverage to vulnerable populations.
A key policy measure is the exemption of 36 life-saving medicines from basic customs duty to reduce patient costs significantly. Finance Minister Sitharaman remarked, “To make life-saving treatments more affordable, we are fully exempting… patient assistance programmes.”
Middle-Class Tax Relief: Tax Regime Simplification
For middle-class taxpayers, the budget introduces reforms aimed at simplifying the tax burden. The new Income Tax Bill plans to cut the volume of the current law by half, making it straightforward and easy to understand. Key proposals include doubling the tax deduction limit on interest for senior citizens and revising the income tax slabs to make income up to ₹12 lakh tax-free under the new regime.
Looking to the Future
The Union Budget 2025 looks forward, addressing diverse sector needs with the overarching aim of achieving Viksit Bharat by 2047. The emphasis on agriculture, MSMEs, clean energy, healthcare, education, and simplified taxation lays the groundwork for sustainable growth. Navigational challenges present themselves as India continues its transformation, but the measures outlined will play significant roles in driving India toward prosperity.