Union Budget 2025-26, Highlights, Key Terms

Union Budget 2025 is an important document that was presented in Lok Sabha on February 1, 2025 . This document contains information on the government's financial plans, including tax policies, spending allocations, and reforms for various sectors.

Enroll Now for UPSC Online Course

Union Budget 2025-26

1. Zero-poverty;
2. 100% good quality school education;
3. Access to high-quality, affordable, and comprehensive healthcare;
4. 100% skilled labour with meaningful employment;
5. 70% women in economic activities; and
6. Farmers making our country the ‘food basket of the world’.

Budget 2025 PDF

Key Features of Budget 2025-2026

Budget 2025 Highlights

Budgetary Allocations & Estimates

Revised Estimates (2024-25) are as follows:

Budget Estimates (2025-26) are as follows:

Fiscal Consolidation

1st Engine: Agriculture

1. The Budget introduces the ' Prime Minister Dhan-Dhaanya Krishi Yojana' to boost productivity, diversify crops, enhance storage, improve irrigation, and provide credit across 100 districts.
2. A new 'Rural Prosperity and Resilience' programme will address underemployment in agriculture.
3. A 6-year "Mission for Aatmanirbharta in Pulses" with other measures to support vegetable, fruit, and cotton productivity.
4. Increase in Kisan Credit Card loan limits from Rs. 3 lakh to Rs. 5 lakh.

2nd Engine: MSMEs

1. Budget highlighted MSMEs as a key driver of development, contributing 45% of exports, and announced enhanced investment and turnover limits to improve scale, technology, and capital access.
2. A new scheme will provide term loans up to Rs. 2 crore over the next 5 years for 5 lakh women, Scheduled Castes, and Scheduled Tribes first-time entrepreneurs.
3. The government will launch a scheme to establish India as a global hub for toys under the 'Made in India' brand and implement a National Manufacturing Mission to promote "Make in India" across industries.

Enroll Now for UPSC Online Course

3rd Engine: Investment

1. 50,000 Atal Tinkering Labs will be set up in schools, broadband will reach rural schools/health centres, and Indian language digital books will be provided.
2. Five National Centres of Excellence for skilling and a Centre of Excellence in AI with ₹500 crore will be established, and gig workers will receive identity cards and healthcare benefits.
3. A ₹ 1.5 lakh crore loan scheme for states, a ₹10 lakh crore Asset Monetization Plan, and a ₹1 lakh crore Urban Challenge Fund for city development.
4. ₹20,000 crore allocated for private-sector R&D, a National Geospatial Mission for urban planning, and the Gyan Bharatam Mission to conserve 1 crore manuscripts.

4th Engine: Exports

1. An Export Promotion Mission, supported by the Ministries of Commerce, MSME, and Finance, will help MSMEs access global markets, with a unified platform, BharatTradeNet (BTN), for trade documentation and financing.
2. The government will boost domestic manufacturing to integrate with global supply chains and support the electronic equipment industry in leveraging Industry 4.0 opportunities.
3. A National Framework will promote Global Capability Centres in emerging tier 2 cities.
4. Infrastructure and warehousing for air cargo, including for high-value perishable horticulture, will be upgraded.

Financial Sector Reforms and Development

1. The government is committed to 'Ease of Doing Business ' by simplifying compliance, expanding services, strengthening regulations, promoting investment, and decriminalizing outdated legal provisions.
2. The FDI limit in insurance will be raised from 74% to 100% for companies investing the entire premium in India.
3. A light-touch, trust-based regulatory framework will be introduced, with a High-Level Committee to review non-financial sector regulations and improve ease of doing business.
4. Key initiatives include launching an Investment Friendliness Index for states , enhancing financial regulations under the FSDC, and decriminalizing over 100 provisions through Jan Vishwas Bill 2.0.

Enroll Now for UPSC Online Course

Union Budget 2025 Income Tax Slabs

Key Terms Related to Union Budget

• Revenue Receipts: Income received by the government through taxes, fines, or services, with no change in assets or liabilities.
• Capital Receipts: Money received from selling government assets or borrowing, leading to changes in assets or liabilities.
• Revenue Expenditure: Regular spending like salaries and subsidies, with no impact on assets.
• Capital Expenditure: Spending that creates or modifies assets, such as infrastructure development.
• Deficit Budget: When the government’s expenditure exceeds its income, leading to a shortfall.
• Surplus Budget : When the government’s income exceeds its expenditure, resulting in excess funds.
• Direct Taxes: Taxes like income tax, where money is directly paid by individuals to the government.
• Indirect Taxes: Taxes like GST, where the money flows from the consumer to the business and then to the government.
• Disinvestment: Selling PSUs or other government assets generates capital receipts.
• Borrowing: When the government borrows money, it gets a receipt but also takes on a liability to repay it.
• Recovery of Loans : If the government recovers money from loans it has given out, the asset (loan) decreases, and the government receives money, which counts as a capital receipt.

Budget 2025 Importance for UPSC Prelims

• Direct Questions in Prelims: Questions on government schemes, tax reforms, or new allocations may come from the Budget.
• Economic Survey Insights : The Budget complements the Economic Survey, which is essential for understanding India’s economic performance.
• Policy Context: It provides a snapshot of the government’s focus areas, helping in subjects like Economy, Polity, and Environment.
• Interdisciplinary Relevance: Topics like sustainable development, healthcare, and infrastructure can overlap with UPSC Mains.