By Bibhudatta Pradhan
Prime Minister Narendra Modi’s government has introduced tax relief measures for the aspiring middle class, which has been grappling with high prices and stagnant wage growth, aiming to boost consumption and revive an economy expanding at its slowest pace in four years.
In the general budget for the fiscal year starting April 1, Finance Minister Nirmala Sitharaman announced reforms in key areas such as taxation, power, and urban development to drive growth in Asia’s third-largest economy.
“This Budget continues our government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance spending power of India’s rising middle class,’’ Sitharaman said on Saturday while presenting the Modi government’s first full-year budget of its third term and her eight consecutive one.
Here is the comprehensive guide:
A: Agriculture: The government has launched a program to improve agricultural conditions in 100 low-productivity districts with moderate crop intensity and below-average credit access, benefiting 1.7 crore farmers.
Artificial Intelligence: The government has announced a Centre of Excellence in Artificial Intelligence for education with an outlay of 500 crore rupees.
B: Bihar: With Bihar set to go to polls later this year, and with two state-based parties as key allies, Sitharaman announced additional measures, including the establishment of a food technology institute and a greenfield airport.
C: Critical Minerals: The government has removed the basic customs duty on cobalt powder and waste, the scrap of lithium-ion battery, lead, zinc, and 12 other critical minerals to ensure their availability for manufacturing in India and create more job opportunities for the youth.
D: Disinvestment: The government has set a disinvestment target of 47,000 crore rupees for the financial year 2026. For the financial year 2025, the revised estimate stands at 33,000 crore rupees, down from the budgeted estimate of 50,000 crore rupees.
E: Expenditure: The budget for 2025-26 has set the total government expenditure at 50.65 lakh crore rupees, up from 47.16 lakh crore rupees in the revised estimates for 2024-25.
F: Farmers: Kisan Credit Cards (KCC) scheme will provide short-term loans to 7.7 crore farmers, fishermen, and dairy farmers, with an enhanced loan limit of 5 lakh rupees.
Meanwhile, the opposition Congress has criticized the budget, stating that the finance minister remained “completely silent” on key farmer demands, including making minimum support price a legal guarantee and waiving farm loans.
Fiscal Deficit: The government aims to reduce the budget deficit in the coming fiscal year to 4.4% of gross domestic product, down from the revised fiscal deficit of 4.8% of current financial year.
G: Gig Workers: About 1 crore gig workers to gain access to healthcare benefits under the Pradhan Mantri Jan Arogya Yojana (PM-JAY), providing enhanced support for their welfare.
H: Household Consumption: The government has lowered tax rates by introducing across-the-board changes in income tax slabs and rates. “The new structure will reduce taxes on middle class and leave more money in their hands, boosting household consumption, savings and investment,’’ Sitharaman said.
I: Insurance: The foreign direct investment limit in the insurance sector will be raised to 100%, up from the current 74%.
J: Jal Jeevan Mission: To achieve 100% coverage in providing access to potable tap water connections, the scheme has been extended until 2028 with an enhanced total outlay. Since 2019, 15 crore households, representing 80% of India’s rural population, have been provided with potable tap water connections.
L: Labour Intensive Sectors: The budget announces the implementation of a scheme to establish India as a global hub for toy manufacturing. Additionally, support has been allocated for the food processing sector to boost growth and employment.
M: Middle Class: Sitharaman announced that no income tax will be payable on annual incomes up to 12 lakh rupees, a move aimed at reducing the tax burden on the middle class and boosting consumer spending.
Manufacturing: The government has announced plans to establish India as a global manufacturing hub for toys, along with measures to support small and medium businesses, which it calls the second engine of growth for the country.
N: National Geospatial Mission: The government will launch the National Geospatial Mission to develop foundational geospatial infrastructure and data, enabling the modernization of land records, urban planning, and infrastructure project
Q: Quality Products: With their high-quality products, MSMEs contribute 45% of India’s exports, said Sitharaman. To help them achieve greater scale, technological upgrades, and improved access to capital, the investment and turnover limits for MSME classification will be enhanced by 2.5 times and 2 times, respectively, she added.
R: Regulatory Reforms: A high-level committee for regulatory reforms will be established to review all non-financial sector regulations, certifications and licenses and propose measures to enhance the ease of doing business.
S: Startups: The government has announced an additional 10,000 crore rupees fund for startups to boost entrepreneurship in India, which has established itself as the world’s third-largest startup ecosystem.
T: Tourism: Top 50 tourist destination sites in the country will be developed in partnership with states through a challenge-based model. Additionally, medical tourism and the ‘Heal in India’ initiative will be promoted in collaboration with the private sector, alongside capacity building and streamlined visa norms, as outlined in the budget.
U: UDAN: A revamped UDAN scheme will be launched to enhance regional connectivity, adding 120 new destinations and aiming to carry 4 crore passengers over the next 10 years.
Urban Challenge Fund: The government has allocated 1 lakh crore rupees to implement initiatives under ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’, and ‘Water & Sanitation’, aiming to drive urban development and modernization.
V: Viksit Bharat: “As we complete the first quarter of the 21st century, continuing geopolitical headwinds suggest lower global economic growth over the medium term. However, our aspiration for a Viksit Bharat inspires us, and the transformative work we have done during our government’s first two terms guides us, to march forward resolutely,’’ said Sitharaman in her budget speech.
W: Women: The government will provide term loans up to 2 crore rupees during next five years to 5 lakh women, scheduled castes and scheduled tribes first-time entrepreneurs.
Z: Z Generation: Gen Z expected the budget to focus on job opportunities, support for the gig economy and startups, digital infrastructure, and tech upskilling. While some of their expectations have been met, their impact on driving economic growth in the coming years remains to be seen.