Saturday, 1 February 2025

As of February 1, 2025, the Indian government has announced the Union Budget for the fiscal year 2025-26, focusing on fiscal consolidation, infrastructure development, and sector-specific incentives. Key allocations and initiatives include:

As of February 1, 2025, the Indian government has announced the Union Budget for the fiscal year 2025-26, focusing on fiscal consolidation, infrastructure development, and sector-specific incentives. Key allocations and initiatives include:

Fiscal Measures:

Fiscal Deficit Target: The government aims to reduce the fiscal deficit to 4.4% of GDP, down from 4.8% in the previous year. 

Borrowing Plans: Gross borrowings are projected at ₹14.82 trillion, with net borrowings at ₹11.54 trillion. 


Tax Reforms:

Personal Income Tax: The nil tax slab has been increased to ₹1.2 million to enhance middle-class spending power. 

Customs Duties: Reductions have been announced for marine products and critical minerals, while life-saving drugs are now exempt from customs duties. 


Sectoral Allocations:

Agriculture: The government plans to increase agricultural spending by over 15%, allocating approximately ₹1.75 lakh crore to boost rural incomes and curb inflation. 

Infrastructure: Capital expenditure is set to rise to ₹11-11.5 lakh crore, up from ₹10 lakh crore in the previous fiscal year, to encourage private investments and infrastructure development. 

Defense: The Ministry of Defence has been allocated ₹6.22 lakh crore, focusing on modernization and self-reliance.


Investment and Reforms:

Foreign Direct Investment (FDI): The FDI limit in the insurance sector has been raised to 100% to deepen market penetration. 

Production Linked Incentive (PLI) Scheme: A new PLI scheme with an outlay of ₹25,000 crore has been approved for electronic components, aiming to attract investments worth ₹40,000-₹45,000 crore. 


Environmental Initiatives:

Green Steel Production: The steel ministry has requested ₹150 billion to incentivize low-carbon steel production, aligning with India's net-zero emissions goal by 2070.


These measures reflect the government's commitment to fiscal prudence, economic growth, and sustainable development.


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