by fyAdmin | Feb 1, 2025 | budget
Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025, bringing substantial benefits to India’s middle class. A major highlight was the exemption of income tax for individuals earning up to ₹12 lakh annually, a measure aimed at boosting disposable income, savings, and investment under the reformed tax system.
Major Announcements:
Taxation Reforms
- Tax Exemption up to ₹12 lakh: Individuals with an annual income up to ₹12 lakh are exempt from paying income tax.
- Standard Deduction of ₹75,000: Salaried individuals earning up to ₹12.75 lakh can benefit from tax exemption due to the standard deduction.
- Updated Tax Slabs:
- Income up to ₹4 lakh: No tax
- ₹4 lakh – ₹8 lakh: 5% tax
- ₹8 lakh – ₹12 lakh: 10% tax
- ₹12 lakh – ₹16 lakh: 15% tax
- ₹16 lakh – ₹20 lakh: 20% tax
- ₹20 lakh – ₹24 lakh: 25% tax
- Above ₹24 lakh: 30% tax
- Extended Tax Return Revision Period: Taxpayers now have 4 years instead of 2 years to revise their tax filings.
- Lower TDS Thresholds: Adjustments made to simplify compliance and reduce administrative burden.
Support for Businesses and Startups
- Enhanced MSME Credit Access: Increased credit coverage from ₹5 crore to ₹10 crore.
- Support for Startups: Eligible startups can access credit up to ₹20 crore from ₹10 crore.
- Additional ₹1.5 lakh crore Credit: Over five years, ₹1.5 lakh crore will be made available to businesses.
- ₹10,000 crore Alternate Investment Fund: New funding initiative to bolster startups.
Senior Citizens’ Benefits
- Tax-Free Withdrawals for NSS Holders: Withdrawals from National Savings Scheme (NSS) post-August 29, 2024, will be tax-exempt.
- NPS Vatsalya Accounts: Receives tax benefits similar to standard National Pension System (NPS) accounts.
Agricultural and Rural Development Initiatives
- Kisan Credit Card (KCC) Loan Increase: Loan limit increased to ₹5 lakh from ₹3 lakh.
- PM Dhan-Dhaanya Krishi Yojana: Aims to benefit 1.7 crore farmers across 100 districts with low productivity.
- Pulses Production Initiative: A six-year plan focusing on Tur, Urad, and Masoor cultivation.
- Comprehensive Fruits & Vegetables Program: Enhancing yield and farmer support.
Employment and Social Security Measures
- Gig Workers’ Welfare: Healthcare access under the PM Jan Arogya Yojana.
- Gig Worker Identity Cards: Registration on the e-Shram portal to formalize employment.
- 1 Crore Gig Workers Recognized: A social security framework introduced.
Infrastructure and Industry Development
- Capital Expenditure Target: Reduced to ₹10.18 lakh crore, down from ₹11.1 lakh crore.
- EV and Mobile Manufacturing Incentives:
- 35 additional capital goods for EV battery manufacturing.
- 28 additional capital goods for mobile phone battery production.
- Customs Duty Exemptions: Key imports exempted to cut manufacturing costs.
- 36 Life-Saving Drugs: Granted duty and tax exemptions.
Tourism and Trade Enhancements
- Visa-Free Entry for Select Tourists: To boost international tourism.
- 50 Tourist Destinations: Development projects in collaboration with state governments.
- Bharat Trade Net Platform: A new digital framework for simplified export documentation.
Education and Research Development
- Expansion of IITs:
- IIT Patna to receive additional infrastructure.
- Five new IIT expansions adding 6,500 seats.
Energy and Sustainability Initiatives
- Nuclear Energy Development:
- 100 GW nuclear power capacity by 2047.
- Amendments to Atomic Energy Act and Civil Liability for Nuclear Damage Act to attract investment.
Foreign Investment and Financial Sector Reforms
- Increased FDI in Insurance: Foreign Direct Investment (FDI) limit raised from 74% to 100%.
- Revamped KYC Registry: Modernized Know Your Customer (KYC) system to be introduced in 2025.
State-Wise Budget Allocations
- Uttar Pradesh: Funding for expressways and urban renewal initiatives.
- Maharashtra: Increased support for Mumbai Metro expansion and rural agricultural development.
- Tamil Nadu: Investments in industrial corridors and IT hub expansion.
- West Bengal: Strengthened MSME and textile industry funding, with enhanced port infrastructure.
- Karnataka: Support for Bengaluru Metro and the growing startup ecosystem.
- Rajasthan: Investment in water conservation and solar energy projects.
- Bihar: Expansion of educational institutions and rural development initiatives.
- Kerala: Tourism enhancement and coastal conservation programs.
Conclusion
The Union Budget 2025 prioritizes financial relief for the middle class, business growth, agriculture, and infrastructure development. With a strategic focus on economic progress, employment generation, and social security, the budget is designed to be inclusive and growth-oriented. These measures are set to foster higher savings, investment, and consumption, further propelling India’s journey toward Viksit Bharat (Developed India).
by fyAdmin | Jan 25, 2025 | budget
Finance Minister Nirmala Sitharaman will be presenting the Union Budget 2025 on 1st February 2025. Note: Please note that the exact date is typically announced by the government closer to the time, but February 1 has been the standard tradition for the past years.
The Union Budget 2025-26, which will be presented by Finance Minister Nirmala Sitharaman, is expected to be a comprehensive roadmap to bolster India’s economic growth and development. This year’s budget is likely to focus on employment generation, skill development, rural upliftment, infrastructure, and middle-class welfare. Here’s a closer look at the key highlights and sector-wise investments that are anticipated.
Key Allocations and Investments
Infrastructure: A Massive Boost
For the financial year 2025-26, the government is expected to announce a ₹12 lakh crore allocation for capital expenditure, a significant increase from ₹11.11 lakh crore in 2024-25. This investment, representing 3.4% of GDP, aims to modernize infrastructure, create jobs, and drive economic growth.
Agriculture: Empowering Farmers
The agriculture sector is anticipated to receive a ₹1.5 lakh crore allocation, marking a 15% increase compared to the previous year. This is expected to be the largest boost in six years, focusing on:
- High-yield seed varieties
- Better storage infrastructure
- Enhanced production of pulses, oilseeds, vegetables, and dairy
Employment and Skill Development
With a strong emphasis on job creation, the government is likely to allocate ₹1.48 lakh crore for education, employment, and skill development. Key initiatives may include:
- First Month’s Wage for New Hires: Businesses hiring first-time workers are expected to have their first month’s salary reimbursed.
- Upskilling 20 Lakh Youth: Industrial Training Institutes (ITIs) are set to be modernized to equip young workers with practical skills.
- 1 Crore Internships: Collaborations with top companies are expected to provide hands-on experience.
Education: Investing in Youth
A substantial portion of the budget is expected to focus on improving education infrastructure and digital learning. Skill development programs will likely be designed to prepare the youth for future challenges and industries.
Defence: Ensuring Security
The government is likely to allocate ₹6 lakh crore for defence, maintaining spending at around 2% of GDP. The focus is expected to be on modernization and promoting self-reliance in defence manufacturing.
Renewable Energy and Energy Security
The budget is expected to continue its commitment to renewable energy, supporting initiatives to reduce carbon emissions and promote sustainability. Investments are likely to focus on diversifying energy sources and enhancing storage capabilities.
MSMEs and Start-Ups: Supporting Small Businesses
Micro, Small, and Medium Enterprises (MSMEs) are anticipated to continue playing a vital role in India’s economy. The budget is expected to include measures such as:
- Easier access to credit
- Tax relief for small businesses
- Subsidies for adopting advanced technology
Tourism: Promoting India’s Heritage
Recognizing tourism as a significant contributor to the economy, funds are likely to be allocated for:
- Developing tourism infrastructure
- Promoting cultural heritage
- Enhancing tourist experiences
Healthcare: Better Infrastructure and Public Health
The healthcare sector is expected to see an increase in funding to improve medical infrastructure and public health initiatives. The focus is likely to be on research, development, and addressing global health challenges.
Railways: Modernizing Transport
Indian Railways is expected to get a ₹2.5 lakh crore allocation, a 15-20% increase over the previous year. This investment will likely be used to modernize rail infrastructure and improve passenger services.
Tax Reforms: Relief Across Income Groups
- Income Tax Exemption: Expected to be raised to ₹5 lakh for lower-income groups.
- Reduced Tax Rates: Likely to introduce a 10% tax for incomes between ₹10-15 lakh.
- New Slab for Upper-Middle Class: A 25% tax may be introduced for incomes between ₹15-20 lakh.
- Simplified Tax Filing: The government is likely to introduce single-page tax return forms for individuals and small businesses.
- Digital Push: AI-driven tax assessment may be introduced to reduce errors and improve transparency.
Investments in Rural Development
Rural areas are likely to remain a priority, with enhanced funding for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Key measures may include:
- Building rural roads, irrigation systems, and storage facilities
- Boosting agricultural productivity
- Ensuring stable income opportunities for rural workers
Key Sectors and Stocks to Watch
Key Sectors
- Infrastructure: Larsen & Toubro (L&T), IRCON International
- Agriculture: UPL Limited, Bharat Rasayan
- Renewable Energy: Tata Power, Adani Green Energy
- Defence: Bharat Electronics Limited (BEL), Hindustan Aeronautics Limited (HAL)
- MSMEs: Small Industries Development Bank of India (SIDBI), CreditAccess Grameen
- Healthcare: Dr. Reddy’s Laboratories, Apollo Hospitals
- Tourism: Indian Hotels Company, Thomas Cook India
- Railways: Rail Vikas Nigam Limited, Container Corporation of India
Stocks to Watch
The following companies are expected to benefit from sector-specific allocations and reforms:
- Infrastructure: Reliance Infrastructure, DLF
- Agriculture: Godrej Agrovet, Coromandel International
- Renewable Energy: NTPC, Suzlon Energy
- Defence: Bharat Dynamics, Cochin Shipyard
- Healthcare: Sun Pharma, Fortis Healthcare
- Tourism: EIH Limited, Lemon Tree Hotels
- Railways: Titagarh Wagons, Texmaco Rail & Engineering
Expected Total Budget Figure
The expected total figure for the Union Budget 2025-26 is likely to exceed ₹45 lakh crore. This projection includes significant investments across key sectors, reflecting the government’s commitment to fostering economic growth and development.
Long-Term Economic Vision
The Union Budget 2025-26 is expected to reflect the government’s vision for sustainable and inclusive growth. By focusing on technology, manufacturing, agriculture, and infrastructure, the government aims to position India as a global economic leader.
Closing Thoughts
This budget is expected to be a testament to India’s commitment to building a prosperous and inclusive future. With investments across critical sectors and relief for all income groups, it is likely to lay the foundation for a stronger, self-reliant India.
The government’s strategic focus on employment, skill development, MSME growth, and rural welfare ensures that economic growth will reach every citizen. As these initiatives unfold, India is poised for a transformative journey toward becoming a global powerhouse.
