Union Budget 2025-26: A populist roadmap for economic growth & social welfare

Guwahati, Feb. 1: Union Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament on Saturday, outlining a vision for “Viksit Bharat” while giving it a distinctly populist touch.

The hour-and-14-minute-long speech focused on the development of farmers, youth, women and the poor, with key announcements across agriculture, MSMEs, exports, and tax reforms.

Sitharaman informed that the budget aligns with the broader principles of a developed India—zero poverty, universal access to quality education and healthcare, full employment with skilled labour, 70% female workforce participation, and a globally competitive agricultural sector.

Highlighting agriculture, MSMEs, investment, and exports as the engines of this transformation, she underscored that inclusivity would remain central to all reforms. With a strong focus on inclusivity, economic expansion, and welfare-driven policies, the Union Budget 2025-26 sets the stage for India’s journey toward “Viksit Bharat” while reinforcing the government’s pro-people stance.

New Tax Slabs: Major relief for salaried individuals

A major populist move was the revision of direct tax slabs, ensuring that individuals earning up to ₹12 lakh per annum will now pay no income tax. Salaried individuals earning up to ₹12.75 lakh per annum will also benefit from a ₹75,000 standard deduction, reducing their tax burden further. This tax relief will cost the government approximately ₹1 lakh crore in revenue, reinforcing its commitment to middle-class welfare.

The Finance Minister reaffirmed the government’s commitment to taxpayer convenience, highlighting past reforms such as faceless assessments, the Taxpayer Charter, faster returns, and the Vivad Se Vishwas scheme. Going forward, the tax department will adopt a “trust first, scrutinise later” approach.

Agriculture: Boosting rural prosperity

A key highlight of the budget is the launch of the “Rural Prosperity and Resilience” programme, aimed at addressing underemployment in agriculture. Implemented in collaboration with states, the initiative will focus on skilling, investment, and technology-driven growth in rural areas. Special attention will be given to rural women, young farmers, small and marginal farmers, and landless families.

In a significant move, the government increased loan limits under the Kisan Credit Card from ₹3 lakh to ₹5 lakh under a modified interest subvention scheme—further cementing its pro-farmer stance.

MSMEs: Fuelling economic growth

Recognising MSMEs as the “second power engine” of India’s economic growth, Sitharaman announced a series of measures to bolster the sector, which contributes 45% of the country’s exports. A new scheme will provide ₹2 crore term loans to five lakh first-time entrepreneurs from Scheduled Castes, Scheduled Tribes, and women over the next five years. Additionally, five National Centres of Excellence for Skilling will be established with global partnerships to prepare India’s workforce for high-end manufacturing.

For the growing gig economy, the government announced identity cards for gig workers, their registration on the e-Shram portal, and healthcare benefits under the PM Jan Arogya Yojana. Further, the Jal Jeevan Mission, which has provided potable tap water to 80% of India’s rural population since 2019, has been extended till 2028, with an emphasis on infrastructure quality and community-driven maintenance.

Exports: Strengthening India’s global footprint

The Export Promotion Mission, jointly led by the Ministries of Commerce, MSME, and Finance, will help MSMEs expand into global markets. Sitharaman also announced measures to strengthen domestic manufacturing capacities and integrate Indian businesses into global supply chains. In a push for Industry 4.0, the government will support domestic electronics manufacturing, while a National Framework for Global Capability Centres will be introduced to develop emerging Tier-2 cities.