Highlights of Union Budget 2025-26
The Union Budget 2025-26 graphically projects ambitious plans for India’s growth, based on key sectors that will form the future of the nation. Agriculture, MSMEs, Investment, Exports, and Taxation are the prime sectors that have been given a boost by the government. Such initiatives are to ensure sustainable growth with opportunities for everyone. The same is how we at Startup Portal Business Services know how significant such developments can be for an entrepreneur or any business. The key highlights show that the future of India is to be transformative growth.
Agriculture: The First Engine of Development
Agriculture still forms the base of India’s development. The government has undertaken several measures to strengthen this sector:
- Limit on Kisan Credit Card Increased: The Kisan Credit Card limit has been raised from Rs. 3 lakh to Rs. 5 lakh, thus helping farmers get better financial support.
- Jal Jeevan Mission Extension: The government has further extended the Jal Jeevan Mission till 2028 for better access of farmers to pure and sustainable sources of water.
MSMEs: The Second Engine of Development
MSMEs remain a backbone for India’s economic development. The following initiatives would support growth:
- Social Welfare Scheme for GIG Workers: This scheme will provide essential social security benefits to gig and platform workers in the MSME sector.
- Investment in Infrastructure: Additional infrastructure will be provided to 5 IITs set up after 2014, with IIT Patna undergoing expansion. This will contribute to skills development, indirectly benefitting the MSME ecosystem.
- Private Sector R&D: The government has allocated Rs. 20,000 crores for R&D in the private sector. It is trying to boost innovation in industries where MSMEs play a support role.
Investment: The Third Engine of Development
Investment will form the backbone of sustainable growth in the economy. The government has presented various measures to attract and nurture investments:
- FDI Limit for Insurance Sector: The FDI limit for the insurance sector is being raised to 100% if the entire premium is invested in India.
- Urban Challenge Fund: The government is setting up a Rs. 1 lakh crore fund to tackle urban challenges, improving infrastructure and fostering growth in cities across the nation.
Exports: The Fourth Engine of Development
India’s export sector is likely to gain from several strategic shifts:
- Top 50 Tourist Destinations: The government will develop the top 50 tourist destinations, focusing on sites associated with Buddhist heritage. This will not only increase tourism but also add to export earnings through international travel.
- Promotion of ‘Heal in India’: The ‘Heal in India’ program envisages the attraction of international patients for health care treatment thereby strengthening India’s position as a Hub for Medical Tourism.
Direct Tax Reforms:
The Union Budget 2025-26 brings in landmark reforms in the area of direct taxes for simplification of tax compliances and relieving the middle class:
- A New Income Tax Bill: A new Income Tax Bill will be tabled in parliament next week with a focus on simplicity and consonance with the existing structure.
- Personal Income Tax for the Middle Class: Major changes in personal income tax
- NIL Income Tax: No income tax up to Rs. 12,00,000 – benefiting millions of middle-class taxpayers.
- Income Tax Slab Changes: The tax slabs have been adjusted to ensure a fairer tax burden across income groups.
- TDS Rationalization: TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) provisions have been rationalized to reduce complexities.
- TDS on Rent: The TDS limit on rent has been increased from Rs. 2.4 lakh to Rs. 6 lakh, offering relief to landlords and tenants.
- Increased TDS Limit for Seniors: There is an enhanced TDS limit for senior citizens, which increases from Rs. 50,000 to Rs. 1,00,000.
Indirect Tax Reforms:
The budget also brings with it several changes in the indirect tax space for encouraging businesses and streamlining the tariff structure:
- Customs Tariff Rationalisation: The structure of customs tariffs will be rationalized to further ease doing business and make imports more efficient.
- Duty Exemption on Life-Saving Drugs: The customs duties have been waived off on 36 life-saving drugs, whereas a 5 percent duty will be levied on six other important medicines.
General Budget Announcements:
Besides sectoral announcements, the government has announced a general direction toward improving infrastructure, innovation, and social welfare:
- Medical College Seats: Adding new medical college seats, in the upcoming year, by 10,000. It aims at adding 75,000 medical college seats over the next five years which will facilitate a larger number of qualified medical professionals.
- Centre for Excellence in AI: 500 crores have been allocated to develop a Centre for Excellence in Artificial Intelligence, which will facilitate innovation and further technological developments.
- Greenfield Airports in Bihar: Greenfield airports will be enabled in Bihar, increasing travel infrastructure beyond major cities such as Patna.
- Revamped KYC Registry: A new Know Your Customer (KYC) registry will be launched to enhance transparency and minimize fraud in financial transactions.
Conclusion:
The Union Budget 2025-26 has set out a very clear and ambitious roadmap for the economic development of India, which focuses on some of the most important sectors of agriculture, MSMEs, investment, exports, and taxation. The government’s efforts are to create sustainable growth, improve infrastructure, support the middle class, and encourage innovation, all while keeping in mind social welfare and economic inclusivity. Startupportal Business Services is here to help you navigate these developments, offering expert advice and support for businesses to make the most of the opportunities created by this budget.