PART-A

• Budget theme: India’s economy is the fastest-growing among all major global economies. The country’s development track record and significant structural reforms over the past decade have drawn global attention. Confidence in India’s capabilities and potential has strengthened during this period. The next five years present a unique opportunity to realize the vision of ‘Sabka Vikas,’ fostering balanced growth across all regions.
• 10 development measures: In this Budget, the proposed development measures span ten broad areas focusing on Garib, Youth, Annadata, and Nari.
  • Spurring Agricultural Growth and Productivity
  • Building Rural Prosperity and Resilience
  • Taking Everyone Together on an Inclusive Growth Path
  • Boosting Manufacturing and Furthering Make in India
  • Supporting MSMEs
  • Enabling Employment-led Development
  • Investing in people, economy, and innovation
  • Securing Energy Supplies
  • Promoting Exports
  • Nurturing Innovation
• Transformative reforms: This Budget aims to initiate transformative reforms across six domains. These will augment growth potential and global competitiveness during the next five years. The domains are:
  • Taxation
  • Power Sector
  • Urban Development
  • Mining
  • Financial Sector
  • Regulatory Reforms
• Four powerful engines: With the help of reforms as the fuel, inclusivity as the guiding spirit, and ‘Viksit Bharat’ as the destination, this budget has included four powerful engines:
  • Agriculture
  • MSME
  • Investment
  • Exports

Engine 1: Agriculture

• Prime Minister Dhan-Dhaanya Krishi Yojana: Developing Agri Districts Programme: The Government, inspired by the success of the Aspirational Districts Programme, will launch the ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states. Targeting 100 districts with low productivity and credit access, the initiative will integrate existing schemes to enhance agricultural productivity, promote sustainable farming, improve irrigation, expand post-harvest storage, and facilitate credit availability. The programme is expected to benefit 1.7 crore farmers.
• Building Rural Prosperity and Resilience: The ‘Rural Prosperity and Resilience’ programme will be launched in partnership with states to address under-employment in agriculture through skilling, investment, and technology. It aims to strengthen the rural economy, ensuring migration is a choice, not a necessity. The initiative will focus on rural women, youth, small and marginal farmers, and landless families, incorporating global best practices and seeking support from multilateral development banks. Phase-1 will cover 100 developing agricultural districts.
• Aatmanirbharta in Pulses: The Government will launch a six-year Mission for Aatmanirbharta in Pulses, focusing on Tur, Urad, and Masoor. NAFED and NCCF will procure these pulses for four years from registered farmers under formal agreements.
• Comprehensive Programme for Vegetables & Fruits: The Government will launch a programme to boost vegetable, fruit, and Shree-Anna production, supply, processing, and pricing, with farmer-producer organizations and cooperatives ensuring implementation.
• Makhana Board in Bihar: A Makhana Board will be established in Bihar to improve the production, processing, and marketing of makhana. Farmers will be organized into FPOs, with the Board offering training and ensuring access to relevant Government schemes.
• National Mission on High-Yielding Seeds: This mission will focus on strengthening research, developing high-yield, pest-resistant, climate-resilient seeds, and ensuring the commercial availability of over 100 new seed varieties.
• Fisheries: India is the second-largest global fish producer, with seafood exports valued at ₹60,000 crore. To unlock the marine sector’s potential, the Government will implement a framework for sustainable fisheries in the Indian Exclusive Economic Zone and High Seas, focusing on the Andaman & Nicobar and Lakshadweep Islands.
• Mission for Cotton Productivity: The Government will launch a Mission for Cotton Productivity to enhance cotton farming productivity and sustainability over the next five years, promoting extra-long staple cotton. Farmers will receive advanced scientific and technological support, helping to increase their incomes and ensure a steady supply of quality cotton for India's traditional textile sector, aligned with the 5F vision.
• Enhanced Credit through KCC: The Kisan Credit Card (KCC) scheme provides short-term loans to 7.7 crore farmers, fishermen, and dairy farmers. Under the Modified Interest Subvention Scheme, the loan limit will be increased from Rs. 3 lakh (US$ 3,460) to Rs. 5 lakh (US$ 5,767) for KCC loans.
• Urea Plant in Assam: To achieve self-sufficiency in urea production, the Government reopened three dormant urea plants in the Eastern region. Additionally, a new plant with an annual capacity of 12.7 lakh metric tons will be established in Namrup, Assam, to enhance urea supply further.
• India Post as a Catalyst for the Rural Economy: India Post, with 1.5 lakh rural post offices, complemented by the India Post Payment Bank and a vast network of 2.4 lakh Dak Sevaks, will be repositioned to act as a catalyst for the rural economy.
• Support to NCDC: The government will provide support to NCDC in its lending operations for the cooperative sector.

Engine 2: MSME

• Revision in classification criteria for MSMEs: India has over one crore registered MSMEs, employing 7.5 crore people and contributing 36% of manufacturing and 45% of exports. To enhance their efficiency, technological advancements, and access to capital, the Government will double the investment and turnover limits for MSME classification. This will boost their growth potential and create more employment opportunities for the youth.
• Significant enhancement of credit availability with guarantee cover: The credit guarantee cover will be increased as follows:
  • For Micro and Small Enterprises, from Rs. 5 crore (US$ 0.6 million) to Rs.10 crore (US$ 1.2 million), enabling an additional Rs. 1.5 lakh crore (US$ 17.30 billion) in credit over the next five years.
  • For Startups, from Rs. 10 crore (US$ 1.2 million) to Rs. 20 crore (US$ 2.3 million), with a reduced guarantee fee of 1% for loans in 27 focus sectors crucial for Atmanirbhar Bharat.
  • For well-run exporter MSMEs, term loans up to Rs. 20 crore (US$ 2.3 million) will be covered.
• Credit Cards for Micro Enterprises: The government will introduce customized Credit Cards with a Rs. 5 lakh (US$ 5,767) limit for micro-enterprises registered on the Udyam portal. In the first year, 10 lakh such cards will be issued.
• Fund of Funds for Startups: The Alternate Investment Funds (AIFs) for startups have secured over Rs. 91,000 crore (US$ 10.50 billion) in commitments, supported by a government-backed Fund of Funds with a contribution of Rs. 10,000 crore (US$ 1.15 billion).
• Scheme for First-time Entrepreneurs: A new scheme will be launched to support five lakh first-time women, Scheduled Castes, and Scheduled Tribes entrepreneurs, providing term loans up to Rs. 2 crore (US$ 0.2 million) over the next five years. The scheme will draw from the successful Stand-Up India initiative and include online capacity-building for entrepreneurship and managerial skills.
• Measures for Labour-Intensive Sectors: To promote employment and entrepreneurship opportunities in labour-intensive sectors, the Government will undertake specific policy and facilitation measures.
• Focus Product Scheme for Footwear & Leather Sectors: A focus product scheme will be implemented to improve the productivity, quality, and competitiveness of India’s footwear and leather sector. The scheme will support design capacity, component manufacturing, and machinery for non-leather footwear in addition to leather footwear and products. It is expected to create 22 lakh jobs, generate Rs. 4 lakh crore (US$ 46.14 billion) in turnover, and achieve exports worth over Rs. 1.1 lakh crore (US$ 12.69 billion).
• Measures for the Toy Sector: Building on the National Action Plan for Toys, a scheme will be launched to make India a global hub for toys. The scheme will focus on developing clusters, skills, and a manufacturing ecosystem to produce high-quality, unique, innovative, and sustainable toys, representing the "Made in India" brand.
• Support for Food Processing: In line with the commitment to 'Purvodaya,' a National Institute of Food Technology, Entrepreneurship, and Management will be established in Bihar. This will boost food processing activities in the Eastern region, resulting in enhanced income for farmers through value addition and providing skilling, entrepreneurship, and employment opportunities for the youth.
• Manufacturing Mission: Furthering “Make in India”: The Government will set up a National Manufacturing Mission covering small, medium, and large industries for furthering “Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states.
• Clean Tech Manufacturing: The Mission will support Clean Tech manufacturing, focusing on enhancing domestic value addition and building the ecosystem for solar PV cells, EV batteries, motors, controllers, electrolyzers, wind turbines, high-voltage transmission equipment, and grid-scale batteries, in line with the commitment to climate-friendly development.

Engine 3: Investment

• Investing in People
  • Saksham Anganwadi and Poshan 2.0: The Saksham Anganwadi and Poshan 2.0 programme provides nutritional support to over eight crore children, one crore pregnant women and lactating mothers, and 20 lakh adolescent girls in aspirational districts and the northeast. The cost norms for nutritional support will be appropriately increased.
  • Atal Tinkering Labs: 50,000 Atal Tinkering Labs will be set up in Government schools in the next five years to cultivate the spirit of curiosity and innovation and foster a scientific temper among young minds.
  • Broadband Connectivity to Government Secondary Schools and PHCs: Broadband connectivity will be provided to all Government secondary schools and primary health centres in rural areas under the Bharatnet project.
  • Bharatiya Bhasha Pustak Scheme: The government proposes to implement this scheme to provide digital-form Indian language books for school and higher education, aiming to help students understand their subjects better.
  • National Centres of Excellence for Skilling: Building on the July 2024 Budget initiative, five National Centres of Excellence for Skilling will be established with global expertise and partnerships to equip youth with the skills needed for “Make for India, Make for the World” manufacturing. These partnerships will focus on curriculum design, trainer training, skills certification, and periodic reviews.
  • Expansion of Capacity in IITs: The number of students in 23 IITs has doubled from 65,000 to 1.35 lakh over the past 10 years. Additional infrastructure will be created in the five IITs established after 2014 to accommodate 6,500 more students, and the hostel and infrastructure capacity at IIT Patna will also be expanded.
  • Centre of Excellence in AI for Education: A Centre of Excellence in Artificial Intelligence for Education will be established with a total outlay of Rs. 500 crore (US$ 57.7 million), building on the three Centres announced in 2023 for agriculture, health, and sustainable cities.
  • Expansion of medical education: The Government has increased UG and PG medical education seats by 130%, adding nearly 1.1 lakh seats over the past 10 years. In the coming year, 10,000 additional seats will be introduced in medical colleges and hospitals, to add 75,000 seats over the next five years.
  • Day Care Cancer Centres in all District Hospitals: The Government will facilitate the setting up of Day Care Cancer Centres in all district hospitals in the next three years. 200 Centres will be established in 2025-26.
  • Strengthening urban livelihoods: The Government will implement a scheme for the socio-economic upliftment of urban workers, focusing on improving their incomes, ensuring sustainable livelihoods, and enhancing their quality of life.
  • PM SVANidhi: The PM SVANidhi scheme, which has benefited over 68 lakh street vendors by providing relief from high-interest informal loans, will be revamped. The new version will offer enhanced loans from banks, UPI-linked credit cards with a Rs. 30,000 (US$ 346.03) limit, and capacity-building support.
  • Social Security Scheme for Welfare of Online Platform Workers: Recognizing the contribution of gig workers to the online platform economy, the government will provide them with identity cards and register them on the e-Shram portal. They will also receive healthcare under the PM Jan Arogya Yojana, benefiting nearly one crore gig workers.
• Investing in the Economy
  • Public Private Partnership in Infrastructure: Each infrastructure-related ministry will develop a 3-year pipeline of projects for implementation in PPP mode. States will also be encouraged to do the same and can seek support from the India Infrastructure Project Development Fund (IIPDF) scheme to prepare PPP proposals.
  • Support to States for Infrastructure: An outlay of Rs. 1.5 lakh crore (US$ 17.30 billion) is proposed for the 50-year interest-free loans to states for capital expenditure and incentives for reforms.
  • Asset Monetization Plan 2025-30: Building on the success of the first Asset Monetization Plan announced in 2021, the second plan for 2025-30 will be launched, aiming to reinvest Rs. 10 lakh crore (US$ 115.34 billion) in new projects. Regulatory and fiscal measures will be adjusted to support the plan.
  • Jal Jeevan Mission: Since 2019, 15 crore households representing 80% of India's rural population have gained access to potable tap water. To achieve 100% coverage, the Mission will be extended until 2028 with an enhanced outlay. The mission will focus on the quality of infrastructure and O&M of rural piped water supply schemes through “Jan Bhagidhari.” Separate MoUs will be signed with states/UTs to ensure sustainability and citizen-centric water service delivery.
  • Urban Sector Reforms: Building on the July Budget proposals, urban sector reforms related to governance, municipal services, urban land, and planning will be incentivized. 
  • Urban Challenge Fund: The Government will establish an Urban Challenge Fund of Rs. 1 lakh crore (US$ 11.53 billion) to implement proposals for ‘Cities as Growth Hubs,’ ‘Creative Redevelopment of Cities,’ and ‘Water and Sanitation’ announced in the July Budget. The fund will finance up to 25% of the cost of bankable projects, with at least 50% funded through bonds, bank loans, and PPPs. An allocation of Rs. 10,000 crore (US$ 1.15 billion) is proposed for 2025-26.
  • Power Sector Reforms: The Government will incentivize electricity distribution reforms and the augmentation of intra-state transmission capacity by states to improve the financial health and capacity of electricity companies. States will be allowed additional borrowing of 0.5% of GSDP, contingent on implementing these reforms.
  • Nuclear Energy Mission for Viksit Bharat: The development of at least 100 GW of nuclear energy by 2047 is crucial for India's energy transition. To foster an active partnership with the private sector, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be pursued. A Nuclear Energy Mission for research and development of Small Modular Reactors (SMR), with an outlay of Rs. 20,000 crore (US$ 2.31 billion), will be established. At least five indigenously developed SMRs are expected to be operational by 2033.
  • Shipbuilding: The Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages, including Credit Notes for shipbreaking in Indian yards to promote the circular economy. Large ships above a specified size will be included in the infrastructure harmonized master list (HML). Shipbuilding Clusters will be supported to expand the range, categories, and capacity of ships, with additional infrastructure facilities, skilling, and technology to develop the entire ecosystem.
  • Maritime Development Fund: A Maritime Development Fund with a corpus of Rs. 25,000 crore (US$ 2.88 million) will be established to provide long-term financing for the maritime industry, promoting distributed support and competition. The Government will contribute up to 49%, with the remaining funds mobilized from ports and the private sector.
  • UDAN - Regional Connectivity Scheme: The UDAN scheme has enabled 1.5 crore middle-class people to travel faster, connecting 88 airports and operationalizing 619 routes. Building on this success, a modified UDAN scheme will be launched to enhance regional connectivity to 120 new destinations and carry four crore passengers in the next 10 years. The scheme will also support helipads and smaller airports in hilly, aspirational, and North-East region districts.
  • Greenfield Airport in Bihar: Greenfield airports will be facilitated in Bihar to meet the state's future needs, alongside the expansion of Patna airport and the development of a brownfield airport at Bihta.
  • Western Koshi Canal Project in Mithilanchal: Financial support will be provided for the Western Koshi Canal ERM Project benefitting a large number of farmers cultivating over 50,000 hectares of land in the Mithilanchal region of Bihar. 
  • Mining Sector Reforms: Mining sector reforms, including those for minor minerals, will be encouraged through the sharing of best practices and the institution of a State Mining Index. A policy for the recovery of critical minerals from tailings will be brought out.  
  • SWAMIH Fund 2: SWAMIH has completed 50,000 dwelling units in stressed housing projects, with keys handed over to homebuyers. In 2025, an additional 40,000 units will be completed, aiding middle-class families. Building on this, SWAMIH Fund 2 will be set up with a Rs. 15,000 crore (US$ 1.73 billion) fund, involving the Government, banks, and private investors, aiming to rapidly complete another 1 lakh units.
  • PM Gati Shakti Data for Private Sector: To further PPPs and assist the private sector in project planning, access to relevant data and maps from the PM Gati Shakti portal will be provided.       
  • Tourism for employment-led growth: The top 50 tourist destinations in India will be developed in partnership with states, with key infrastructure supported by the states' land and hotels included in the infrastructure HML. Employment-led growth will be facilitated through skill-development programs, MUDRA loans for homestays, enhanced travel connectivity, performance-linked incentives for states in destination management, and streamlined e-visa facilities. A special focus will be placed on destinations related to Lord Buddha’s life, further boosting spiritual tourism and employment opportunities. 
  • Medical Tourism and Heal in India: Medical Tourism and Heal in India will be promoted in partnership with the private sector along with capacity building and easier visa norms.
• Investing in Innovation
  • Research, Development and Innovation: To implement private sector driven Research, Development and Innovation initiative announced in the July Budget, the government has now allocated Rs. 20,000 crore (US$ 2.31 billion).
  • Deep Tech Fund of Funds: A Deep Tech Fund of Funds will also be explored to catalyze the next generation startups as a part of this initiative. 
  • PM Research Fellowship: In the next five years, under the PM Research Fellowship scheme, the government will provide ten thousand fellowships for technological research in IITs and IISc with enhanced financial support. 
  • Gene Bank for Crops Germplasm: The 2nd Gene Bank with 10 lakh germplasm lines will be set up for future food and nutritional security. 
  • National Geospatial Mission: The National Geospatial Mission will be launched to develop foundational geospatial infrastructure and data. Using PM Gati Shakti, the mission aims to modernize land records, improve urban planning, and enhance the design of infrastructure projects.
  • Gyan Bharatam Mission: The Gyan Bharatam Mission will focus on surveying, documenting, and conserving India's manuscript heritage in collaboration with academic institutions, museums, libraries, and private collectors. The mission aims to cover over one crore manuscripts and establish a National Digital Repository of Indian knowledge systems to promote knowledge sharing.

Engine 4: Exports

• Export Promotion Mission: The Government will establish an Export Promotion Mission with sectoral and ministerial targets led by the Ministries of Commerce, MSME, and Finance. This mission will improve access to export credit, cross-border factoring support, and assist MSMEs in addressing non-tariff barriers in international markets.
• BharatTradeNet: The Government will establish BharatTradeNet (BTN), a digital public infrastructure for international trade. BTN will serve as a unified platform for trade documentation and financing solutions, complementing the Unified Logistics Interface Platform. It will be aligned with global practices.
• Support for integration with Global Supply Chains: The Government will support the development of domestic manufacturing capacities to integrate the economy with global supply chains, identifying sectors based on objective criteria. Facilitation groups, involving senior officers and industry representatives, will be formed for select products and supply chains. Additionally, the Government will help the domestic electronic equipment industry leverage Industry 4.0 opportunities, which require high skills and talent, benefiting the youth.
• National Framework for GCC: A national framework will be formulated as guidance for states to promote Global Capability Centres in emerging tier two cities.
• Warehousing facility for air cargo: The Government will facilitate the upgradation of infrastructure and warehousing for air cargo, including high value perishable horticulture produce. Cargo screening and customs protocols will be streamlined and made user-friendly.    

Reforms as the Fuel

• Tax Reforms: Over the past decade, the Government has introduced several taxpayer-friendly reforms, including faceless assessment, a taxpayer charter, faster returns, self-assessment of nearly 99% returns, and the ‘Vivad se Vishwas’ scheme. Building on these efforts, the Government reaffirms its commitment to a "trust first, scrutinize later" approach for the tax department.

Financial Sector Reforms and Development

• FDI in Insurance Sector: The Foreign Direct Investment (FDI) limit for the insurance sector will be increased from 74% to 100%. This higher limit will apply to companies that invest the entire premium in India. Additionally, the existing regulations and conditions for foreign investment will be reviewed and simplified.
• Expanding Services of India Post Payment Bank: India Post Payment Bank's services will be deepened and expanded in rural areas.
• Credit Enhancement Facility by NaBFID: NaBFID will set up a ‘Partial Credit Enhancement Facility’ for corporate bonds for infrastructure.
• Grameen Credit Score: Public Sector Banks will develop a ‘Grameen Credit Score’ framework to serve the credit needs of SHG members and people in rural areas.
• Pension Sector: A forum for regulatory coordination and development of pension products will be set up.
• KYC Simplification: The revamped Central KYC Registry will be launched in 2025 to simplify the KYC process. A streamlined system for periodic updates will also be implemented to ensure smoother operations.
• Merger of Companies: Requirements and procedures for speedy approval of company mergers will be rationalized. The scope for fast-track mergers will also be widened and the process made simpler.
• Bilateral Investment Treaties: In 2024, India signed Bilateral Investment Treaties (BIT) with two countries, as proposed in the Interim Budget. To attract sustained foreign investment and promote the "first develop India" approach, the current model BIT will be revamped to be more investor-friendly.
• Regulatory Reforms: Over the last decade, the government has shown unwavering commitment to "Ease of Doing Business" across financial and non-financial sectors. Determined to keep pace with technological and global policy advancements, the government will introduce a light-touch regulatory framework based on principles and trust. This will boost productivity and employment. As part of this, outdated regulations will be updated, and four specific measures will be proposed to create a modern, flexible, people-friendly, and trust-based regulatory framework for the twenty-first century.
  • High Level Committee for Regulatory Reforms: A High-Level Committee for Regulatory Reforms will be established to review all non-financial sector regulations, certifications, licenses, and permissions. The committee will make recommendations within a year to strengthen trust-based economic governance and improve the "ease of doing business," focusing on inspections and compliances. States will be encouraged to participate in this initiative.
  • Investment Friendliness Index of States: An Investment Friendliness Index of States will be launched in 2025 to further the spirit of competitive cooperative federalism.
  • FSDC Mechanism: Under the Financial Stability and Development Council, a mechanism will be set up to evaluate impact of the current financial regulations and subsidiary instructions. It will also formulate a framework to enhance their responsiveness and development of the financial sector.
  • Jan Vishwas Bill 2.0: In the Jan Vishwas Act 2023, more than 180 legal provisions were decriminalized. The government will now bring up the Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various laws.
• Fiscal Policy: The government remains committed to fiscal consolidation, aiming to keep the fiscal deficit each year in a way that ensures the Central Government debt declines as a percentage of GDP.
• Revised Estimates 2024-25
  • The Revised Estimate of the total receipts other than borrowings is Rs. 31.47 lakh crore (US$ 362.98 billion), of which the net tax receipts are Rs. 25.57 lakh crore (US$ 294.93 billion). The Revised Estimate of the total expenditure is Rs. 47.16 lakh crore (US$ 543.94 billion), of which the capital expenditure is about Rs. 10.18 lakh crore (US$ 117.42 billion).
  • The Revised Estimate of the fiscal deficit is 4.8% of GDP.
• Budget Estimates 2025-26
  • Coming to 2025-26, the total receipts other than borrowings and the total expenditure are estimated at Rs. 34.96 lakh crore (US$ 403.23 billion) and Rs. 50.65 lakh crore (US$ 584.20 billion) respectively. The net tax receipts are estimated at Rs. 28.37 lakh crore (US$ 327.22 billion).
  • The fiscal deficit is estimated to be 4.4% of GDP.
  • To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs. 11.54 lakh crore (US$ 133.10 billion). The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs. 14.82 lakh crore (US$ 170.93 billion).