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Focusing on middle class, Nirmala Sitharaman quoted Telugu poet and playwright Gurajada Appa Rao: ‘A country is not just its soil, a country is its people.’
Budget 2025: Union Finance Minister Nirmala Sitharaman presents Budget.
Finance Minister Nirmala Sitharaman on Saturday unveiled “transformative” tax reforms that ranged from a simpler income tax law to higher TCS threshold for remittances and income tax benefits for middle class.
Sitharaman in 2025-26 Budget promised to bring a simpler, less volumnous new law to replace six decades old law governing income tax, saying it will have the spirit of “Nyay” (justice) and will work on the principle of “trust first, scrutinize later”.
She also extended the time limit to 4 years for individuals filing updated tax returns. Updated returns are filed by taxpayers who had omitted to report their correct income. Currently, such returns can be filed within two years of the relevant assessment year.
Here’s Her Full Speech
Hon’ble Speaker,
I present the Budget for 2025-26.
Introduction
1. This Budget continues our Government’s efforts to:
a) accelerate growth,
b) secure inclusive development,
c) invigorate private sector investments,
d) uplift household sentiments, and
e) enhance spending power of India’s rising middle class.
2. Together, we embark on a journey to unlock our nation’s tremendous potential for greater prosperity and global positioning under the leadership of Hon’ble Prime Minister Shri Narendra Modi.
3. 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.
Budget Theme
4. Our economy is the fastest-growing among all major global economies. Our development track record of the past 10 years and structural reforms have drawn global attention. Confidence in India’s capability and potential has only grown in this period. We see the next five years as a unique opportunity to realize ‘Sabka Vikas’, stimulating balanced growth of all regions.
5. The great Telugu poet and playwright Gurajada Appa Rao had said, ‘Desamante Matti Kaadoi, Desamante Manushuloi’; meaning, ‘A country is not just its soil, a country is its people.’ In line with this, for us, Viksit Bharat, encompasses:
a) zero-poverty;
b) hundred per cent good quality school education;
c) access to high-quality, affordable, and comprehensive healthcare;
d) hundred per cent skilled labour with meaningful employment;
e) seventy per cent women in economic activities; and
f) farmers making our country the ‘food basket of the world’.
6. In this Budget, the proposed development measures span ten broad areas focusing on Garib, Youth, Annadata and Nari.
1) Spurring Agricultural Growth and Productivity;
2) Building Rural Prosperity and Resilience;
3) Taking Everyone Together on an Inclusive Growth path;
4) Boosting Manufacturing and Furthering Make in India;
5) Supporting MSMEs;
6) Enabling Employment-led Development;
7) Investing in people, economy and innovation;
8) Securing Energy Supplies;
9) Promoting Exports; and
10) Nurturing Innovation.
7. For this journey of development,
a) Our four powerful engines are: Agriculture, MSME, Investment, and Exports
b) The fuel: our Reforms
c) Our guiding spirit: Inclusivity
d) And the destination: Viksit Bharat
8. This Budget aims to initiate transformative reforms across six domains. During the next five years, these will augment our growth potential and global competitiveness. The domains are:
1) Taxation;
2) Power Sector;
3) Urban Development;
4) Mining;
5) Financial Sector; and
6) Regulatory Reforms.
Agriculture as the 1st Engine
9. Now I move to specific proposals, beginning with ‘Agriculture as the 1st Engine’.
Prime Minister Dhan-Dhaanya Krishi Yojana – Developing Agri Districts Programme
10. Motivated by the success of the Aspirational Districts Programme, our Government will undertake a ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states. Through the convergence of existing schemes and specialized measures, the programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters. It aims to (1) enhance agricultural productivity, (2) adopt crop diversification and sustainable agriculture practices, (3) augment post-harvest storage at the panchayat and block level, (4) improve irrigation facilities, and (5) facilitate availability of long-term and short-term credit. This programme is likely to help 1.7 crore farmers.
Building Rural Prosperity and Resilience
11. A comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme will be launched in partnership with states. This will address under-employment in agriculture through skilling, investment, technology, and invigorating the rural economy. The goal is to generate ample opportunities in rural areas so that migration is an option, but not a necessity.
12. The programme will focus on rural women, young farmers, rural youth, marginal and small farmers, and landless families. Details are in Annexure A.
13. Global and domestic best practices will be incorporated and appropriate technical and financial assistance will be sought from multilateral development banks. In Phase-1, 100 developing agri-districts will be covered.
Aatmanirbharta in Pulses
14. Our Government is implementing the National Mission for Edible Oilseed for achieving atmanirbhrata in edible oils. Our farmers have the capability to grow enough for our needs and more.
15. Ten years ago, we made concerted efforts and succeeded in achieving near self-sufficiency in pulses. Farmers responded to the need by increasing the cultivated area by 50 per cent and Government arranged for procurement and remunerative prices. Since then, with rising incomes and better affordability, our consumption of pulses has increased significantly.
16. Our Government will now launch a 6-year “Mission for Aatmanirbharta in Pulses” with a special focus on Tur, Urad and Masoor. Details are in Annexure B. Central agencies (NAFED and NCCF) will be ready to procure these 3 pulses, as much as offered during the next 4 years from farmers who register with these agencies and enter into agreements.
Comprehensive Programme for Vegetables & Fruits
17. It is encouraging that our people are increasingly becoming aware of their nutritional needs. It is a sign of a society becoming healthier. With rising income levels, the consumption of vegetables, fruits and shree-anna is increasing significantly. A comprehensive programme to promote production, efficient supplies, processing, and remunerative prices for farmers will be launched in partnership with states. Appropriate institutional mechanisms for implementation and participation of farmer producer organizations and cooperatives will be set up.
Makhana Board in Bihar
18. For this, there is a special opportunity for the people of Bihar. A Makhana Board will be established in the state to improve production, processing, value addition, and marketing of makhana. The people engaged in these activities will be organized into FPOs. The Board will provide handholding and training support to makhana farmers and will also work to ensure they receive the benefits of all relevant Government schemes.
National Mission on High Yielding Seeds
19. A National Mission on High Yielding Seeds will be launched, aimed at (1) strengthening the research ecosystem, (2) targeted development and propagation of seeds with high yield, pest resistance and climate resilience, and (3) commercial availability of more than 100 seed varieties released since July 2024.
Fisheries
20. India ranks second-largest globally in fish production and aquaculture. Seafood exports are valued at ` 60 thousand crore. To unlock the untapped potential of the marine sector, our Government will bring in an enabling framework for sustainable harnessing of fisheries from Indian Exclusive Economic Zone and High Seas, with a special focus on the Andaman & Nicobar and Lakshadweep Islands.
Mission for Cotton Productivity
21. For the benefit of lakhs of cotton growing farmers, I am pleased to announce a ‘Mission for Cotton Productivity’. This 5-year mission will facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties. The best of science & technology support will be provided to farmers. Aligned with our integrated 5F vision for the textile sector, this will help in increasing incomes of the farmers, and ensure a steady supply of quality cotton for rejuvenating India’s traditional textile sector.
Enhanced Credit through KCC
22. Kisan Credit Cards (KCC) facilitate short term loans for 7.7 crore farmers, fishermen, and dairy farmers. The loan limit under the Modified Interest Subvention Scheme will be enhanced from ` 3 lakh to 5 lakh for loans taken through the KCC.
Urea Plant in Assam
23. For Atmanirbharta in urea production, our Government had reopened three dormant urea plants in the Eastern region. To further augment urea supply, a plant with annual capacity of 12.7 lakh metric tons will be set up at Namrup, Assam.
India Post as a Catalyst for the Rural Economy
24. 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. Details are at Annexure C.
25. India Post will also be transformed as a large public logistics organization. This will meet the rising needs of Viswakarmas, new entrepreneurs, women, self-help groups, MSMEs, and large business organizations.
Support to NCDC
26. Our Government will provide support to NCDC for its lending operations for the cooperative sector.
MSMEs as the 2nd engine
27. Now, I move to MSMEs as the 2nd engine, which encompasses manufacturing and services with a focus on MSMEs numbering 5.7 crore.
Revision in classification criteria for MSMEs
28. Currently, over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45 per cent of our exports. To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. This will give them the confidence to grow and generate employment for our youth. The details are in Annexure D.
Significant enhancement of credit availability with guarantee cover
29. To improve access to credit, the credit guarantee cover will be enhanced:
a) For Micro and Small Enterprises, from ` 5 crore to 10 crore, leading to additional credit of ` 1.5 lakh crore in the next 5 years;
b) For Startups, from ` 10 crore to 20 crore, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors important for Atmanirbhar Bharat; and
c) For well-run exporter MSMEs, for term loans up to ` 20 crore.
Credit Cards for Micro Enterprises
30. We will introduce customized Credit Cards with a ` 5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued.
Fund of Funds for Startups
31. The Alternate Investment Funds (AIFs) for startups have received commitments of more than ` 91,000 crore. These are supported by the Fund of Funds set up with a Government contribution of ` 10,000 crore. Now, a new Fund of Funds, with expanded scope and a fresh contribution of another 10,000 crore will be set up.
Scheme for First-time Entrepreneurs
32. A new scheme will be launched for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up to ` 2 crore during the next 5 years. The scheme will incorporate lessons from the successful Stand-Up India scheme. Online capacity building for entrepreneurship and managerial skills will also be organized.
Measures for Labour-Intensive Sectors
33. To promote employment and entrepreneurship opportunities in labour-intensive sectors, our Government will undertake specific policy and facilitation measures.
Focus Product Scheme for Footwear & Leather Sectors
34. To enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of ` 4 lakh crore and exports of over ` 1.1 lakh crore.
Measures for the Toy Sector
35. Building on the National Action Plan for Toys, we will implement a scheme to make India a global hub for toys. The scheme will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys that will represent the ‘Made in India’ brand.
Support for Food Processing
36. In line with our commitment towards ‘Purvodaya’, we will establish a National Institute of Food Technology, Entrepreneurship and Management in Bihar. The institute will provide a strong fillip to food processing activities in the entire Eastern region. This will result in (1) enhanced income for the farmers through value addition to their produce, and (2) skilling, entrepreneurship and employment opportunities for the youth.
Manufacturing Mission – Furthering “Make in India”
37. Our 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. Details are in Annexure E.
Clean Tech Manufacturing
38. Given our commitment to climate-friendly development, the Mission will also support Clean Tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid scale batteries.
Investment as the 3rd engine
39. Now, I move to Investment as the 3rd engine, which encompasses investing in people, investing in the economy and investing in innovation.
A. Investing in People
Saksham Anganwadi and Poshan 2.0
40. The Saksham Anganwadi and Poshan 2.0 programme provides nutritional support to more than 8 crore children, 1 crore pregnant women and lactating mothers all over the country, and about 20 lakh adolescent girls in aspirational districts and the north-east region. The cost norms for the nutritional support will be enhanced appropriately.
Atal Tinkering Labs
41. Fifty thousand Atal Tinkering Labs will be set up in Government schools in next 5 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
42. 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
43. We propose to implement a Bharatiya Bhasha Pustak Scheme to provide digital-form Indian language books for school and higher education. This aims to help students understand their subjects better.
National Centres of Excellence for Skilling
44. Building on the initiative announced in the July 2024 Budget, five National Centres of Excellence for skilling will be set up with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing. The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews.
Expansion of Capacity in IITs
45. Total number of students in 23 IITs has increased 100 per cent from 65,000 to 1.35 lakh in the past 10 years. Additional infrastructure will be created in the 5 IITs started after 2014 to facilitate education for 6,500 more students. Hostel and other infrastructure capacity at IIT, Patna will also be expanded.
Centre of Excellence in AI for Education
46. I had announced three Centres of Excellence in Artificial Intelligence for agriculture, health, and sustainable cities in 2023. Now a Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of ` 500 crore.
Expansion of medical education
47. Our Government has added almost 1.1 lakh UG and PG medical education seats in ten years, an increase of 130 per cent. In the next year, 10,000 additional seats will be added in medical colleges and hospitals, towards the goal of adding 75,000 seats in the next 5 years.
Day Care Cancer Centres in all District Hospitals
48. Our Government will facilitate setting up of Day Care Cancer Centres in all district hospitals in the next 3 years. 200 Centres will be established in 2025-26.
Strengthening urban livelihoods
49. Our Government has been giving priority to assisting urban poor and vulnerable groups. A scheme for socio-economic upliftment of urban workers will be implemented to help them improve their incomes, have sustainable livelihoods and a better quality of life.
PM SVANidhi
50. PM SVANidhi scheme has benefitted more than 68 lakh street vendors giving them respite from high-interest informal sector loans. Building on this success, the scheme will be revamped with enhanced loans from banks, UPI linked credit cards with ` 30,000 limit, and capacity building support.
