Union Finance Minister Nirmala Sitharaman presented the first full-fledged budget of the Modi 3.0 government, focusing on the common class development and ensuring a balance in tax and growth needs. Securing inclusive development and pouring into the middle class, the GDP growth is projected at 6.3-6.8% in FY26. Poor, farmer, youth, and women empowerment are the major categories focused on in the budget session. This budget will envisage an expenditure of Rs 50,653,45 crore, an increase of percent over the current fiscal.
Budget for Agriculture Production
This budget comes as close to sight on Atma Nirbhar in the Agri production. With a projection of an average age of 6.4% in FY 24, showing a fall in the last four years. According to the economic survey report, Indian GDP growth will be around 6.3-6.8% in the coming year, which fails to meet the needs of Viksit Bharat by 2047.
To see the hope of sustainable development and look at India as the world’s leading growth house, the push of an 8% annual GDP rate is crucial to achieve. Our economy is one of the fastest-growing economies across the globe. We see the next five years with Sabka Sath, Sabka Vikash, said by Nirmala Sitharaman, presenting the budget in the house.
The recent government is ready to make India’s Atma Nirbhar in agri production. In this budget, the finance minister focused on uplifting every sector inside agriculture. Planning to boost the cotton industry, increasing pulse consumption, and being self-sufficient in urea production are the major and deep decisions that have been taken by the government to ensure accountability.
Centralised approach in budget 2025-26
In this budget presentation, the main highlights are the acceleration of growth, secure inclusive development, invigorating private sector investment, uplifting households, and the development of the middle class with careful consideration of rural areas. Nirmala Sitharaman announced PM Dhan Dhyan Krishi Yojana, covering 100 districts with low yields, modern crop intensity, and below-average credit parameters. She said that the scheme would benefit 1.7 crore farmers.
Allocation of MSMEs Budget
Additionally for the MSME sector, she emphasised that the credit guarantee cover limits for the MSME sector will be enhanced. The MSME credit guarantee cover will be doubled from ₹5 crore to ₹10 crore, leading to an additional ₹1.5 lakh crore credit in the next 5 years. She also said that customised credit cards with a limit of ₹5 lakh will be started for small businesses registered on the Udyam Portal.
Udaan Scheme for Common People
More than 1.5 crore people have taken benefit of the Udaan Scheme in the last decade. In the coming years, the government will enhance regional connectivity, building airports in hilly areas, and plans to carry more than 4 crore additional flyers. This will help common-class people to reach their destination without delay.
Helpful Budget for Youth
For youth, this budget is also favourable. The government introduced major schemes for young minds, including job incentives, skill training, education loans, and paid internships. The finance minister announced Rs 1.48 lakh crore for education and employment for the coming fiscal year. Under this scheme, students can easily get first-time jobs and employers hiring youth. The government is ready to set additional infrastructure in IIT and IISc to build research and development facilities. An approx. 3000 crore fund will be provided to new entrepreneurs and also empower AI in education.
Better Cities Scheme with Urban Challenge Fund
For the development of cities, the government will set up an urban challenge fund of ₹1 lakh crore to implement the proposals for cities as growth hubs, creative redevelopment of cities, and for water and sanitation purposes. She said that this budget will finance up to 25 percent of the cost of bankable projects with a stipulation that at least 50 percent of the cost is funded from bonds, bank loans, and PPPs [Public-Private Partnerships], and an allocation of ₹10,000 crore is proposed in 2025-26.
Budget for Defence
For taking out the security of the nation, the government focused on the defence budget, allocating over ₹6.8 lakh crore, including ₹1.8 lakh crore for military modernisation. This marks a 9% increase from last year, aiming to boost India’s military capability and self-reliance.
Budget for Road and Railway
To ensure effectiveness in transportation, the government has also made an intuitive decision to increase the railway budget from 2.52 to 2.53 lakh crore in the 2025-26 budget. In this budget, the government focuses on ensuring track expansion, infrastructure modernisation, and acquisition of vital equipment, including locomotives, coaches, and waggons.
In this budget session, Rs 2,873.33 crore has been allocated for the road transport and highways for 2025-26, which is 2.41% up from the outlays of Rs 2,805.18 crore in the current financial year. Finance Minister Nirmala Sitharaman on Saturday also increased the allocation to state-owned National Highways Authority of India (NHAI) to Rs 1,878.03 crore from last year’s Rs 1,693.71 crore.
Power infrastructure to get a boost via the PPP model
The Union Budget 2025-26 continues shifting infrastructure growth to states and the private sector, emphasising the PPP (Public Private Partnership) model in housing and power. She highlighted private investment as a key focus, with housing receiving the highest priority, followed by power and mining. Only housing and shipping saw major capital expenditure increases.
Finance Minister Nirmala Sitharaman has proposed Rs 48,396 crore towards the power sector, including new and renewable energy for the 2025-26 financial year. This outlay is an increase of 30 percent over the previous year’s allocation of Rs 37,143 crore and 22 percent over the budget estimate of Rs 39,602 crore.
AI push with Rs 2,200 crore allocation
As digital transformation is paving the whole way, everything is becoming easy to work on. The government is ready to spend Rs 2,200 crore for AI that has been allocated for 2025-26, up from Rs 806.75 crore in the previous budget. The boost comes amid China’s rise with DeepSeek, challenging US dominance in large language models. The ministry emphasised India’s capability to leverage GPUs and host AI models locally. They will focus on the creation of excellence for AI in education.
Health and Medical Tourism
Ensuring the good way for health & family welfare, the government allocated Rs 99,858.56 crore for the Ministry of Health and Family Health Care. Our government will make 36 lifesaving drugs duty-free. And also established cancer daycare centres in all districts, said the finance minister.
The budget will also be used for improving healthcare infrastructure. The 2% increase is reflective of the Indian government’s rising focus on Indian health. However, it can also be used to increase medical seats for 10000 students by next year or to increase cancer daycare centers in district hospitals in the next 3 years, considering there will be continued focus on maintaining existing healthcare programs.
Medical tourism will help improve global healthcare awareness and help promote awareness about advances in Indian healthcare practices. It will improve international collaboration and strengthen the Indian healthcare brand globally.
Export and Import
Part of the budget announcements for 2025-26, the initiative aims to narrow India’s trade deficit, which hit a record $32.8 billion in November 2024. As part of the plan, the finance ministry will streamline credit access for exporters, addressing a major hurdle for businesses seeking global markets.
The government will remove seven tariff rates. This is over and above the seven tariff rates removed in the 2023-24 budget. After this, there will be only eight remaining tariff rates, including the ‘zero’ rate.
What Does It Offer Senior Citizens?
In this budget, the government has also proposed to rationalise TDS for senior citizens by reducing the number of rates and thresholds above which TDS is deducted. The limit for TDS has been increased to Rs 50,000 from the current Rs 40,000.
More Important Aspects
Under the newly announced tax slabs in this budget, no income tax will be payable on an annual income of up to Rs 1,200,000. For salaried individuals opting for the new tax regime, income of up to Rs 12,75,000 will be tax-free.
But those who are earning more than 12 lakhs will come under different tax slabs.
Zero to Rs 400,000—No Tax
Rs 4,00,000 to Rs 8,00,000—5%
Rs 800,001 to Rs 1,200,000—10%
Rs 12,00,001 to Rs 16 lakh—15%
Rs 16,00,001 to Rs 20 lakh—20%
Rs 20,00,001 to Rs 24 lakh—25%
Above 24 lakh—30%
Expansion of Bihar
Covering the whole issue, the centre is ensuring a positive approach for Bihar as the election is coming. Nirmala Sitharaman announced that Bihar will get a major infrastructural boost with plans to expand Patna airport, establish four greenfield airports, and a brownfield airport at Bihta.
A National Institute of Food Technology was proposed to support food processing, along with financial aid for the Western Kosi Canal ERM project benefiting farmers. The IIT in Bihar will also be expanded. Bihar was mentioned eight times in the finance minister’s speech.
Aim to achieve the mission of Bikshit Bharat.
In this budget, the government is fully focused on developing all sectors and ensuring transparency in taxpayers convenience. Making the growth of middle-class people, the government includes everything as closely as they do.
