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.