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Finance Minister Nirmala Sitharaman presented the Union Budget 2025 on February 1, marking her eighth consecutive budget. The FY26 Budget focuses on accelerating economic growth and strengthening the middle class. Key highlights include an increased income tax exemption threshold, revised tax slabs, and enhanced support for startups and MSMEs. Additionally, the Budget emphasizes agricultural development, infrastructure expansion, and job creation. These strategic measures aim to boost the economy and enhance the overall quality of life in the country.

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Union Budget 2025-26: Detailed Report

Explore I.P. Pasricha & Co (IPPC GROUP) detailed report on Union Budget 2024-25 and its impact on various sectors including budget key highlights, sector-specific insights, Section-wise Direct and Indirect Tax proposals and expert analysis. Gain valuable insights into the budget’s implications and strategic reforms.

We hope you find this analysis both informative and impactful.

Sector Wise Union Budget 2025 Highlights

The Budget 2025 strengthens financial inclusion by increasing the KCC loan limit to ₹5 lakh and expanding India Post Payment Bank services in rural areas. A Partial Credit Enhancement Facility will boost infrastructure financing, while Public Sector Banks will introduce a ‘Grameen Credit Score’ for rural borrowers. A new forum will enhance pension product regulations, and a revamped Central KYC registry will simplify compliance. Additionally, a ₹25,000 crore Maritime Development Fund, with up to 49% government contribution, will provide long-term financing for the maritime sector.

The FDI limit in the insurance sector will be increased from 74% to 100% for companies investing the entire premium in India.

A new ₹10,000 crore Fund of Funds will support startups, along with an increase in credit guarantees from ₹10 crore to ₹20 crore. The government will extend the Section 80-IAC benefit for startups for an additional five years, and a new scheme will provide loans of up to ₹2 crore for 5 lakh first-time entrepreneurs, including women and marginalized groups.

The government will establish Day Care Cancer Centres in all district hospitals by 2026, with 200 centers set up in 2025-26. Gig workers will be covered under PM Jan Arogya Yojana, and medical seats will increase by 10,000 next year, with 75,000 added in five years. The ‘Heal in India’ initiative will promote medical tourism with private sector collaboration and streamlined visa processes.

The SWAMIH Fund will complete 40,000 housing units in 2025-26, with SWAMIH Fund-2 allocating ₹15,000 crore for 1 lakh more units. The Urban Challenge Fund of ₹1 lakh crore will support urban growth and redevelopment, with ₹10,000 crore allocated for 2025-26 to fund projects through PPPs, loans, and bonds.

The Budget 2025 strengthens healthcare with tax exemptions on employer-covered overseas treatments and extended customs duty relief on life-saving drugs. The NPS Vatsalya Scheme allows tax-free withdrawals for medical and disability-related expenses. Medical education gets a boost with 10,000 new UG/PG seats, while 200 Day Care Cancer Centers will be set up in 2025-26. Gig workers gain health insurance under PM Jan Arogya Yojana, and medical tourism expands under the “Heal in India” initiative. Additionally, lower duties on critical drugs aim to make essential treatments more affordable.

The Budget 2025 prioritizes innovation and R&D with a ₹20,000 crore investment for private-sector research, a Deep Tech Fund for AI and robotics, and support for clean tech manufacturing. It boosts AI applications in key sectors, expands research fellowships, and advances agriculture through a Gene Bank and high-yield seed programs. Key initiatives include tax exemptions for space and electronics manufacturing, a ₹10,000 crore startup fund, and incentives for multinational R&D hubs. Additionally, the Budget enhances healthcare, education, and infrastructure with investments in cancer care, Atal Tinkering Labs, nuclear energy, and smart urban planning.

The Budget 2025 focuses on expanding India’s power and energy sector with ambitious goals for renewable energy. The target is 500 GW of renewable capacity by 2030, with investments in solar, wind, and hydroelectric power. A ₹20,000 crore Nuclear Energy Mission aims to establish 100 GW of nuclear capacity by 2047, with the development of Small Modular Reactors (SMRs) and the operationalization of five SMRs by 2033. The initiative also includes amending key laws to encourage private sector participation and advance nuclear technology research.

The Budget 2025 drives infrastructure and urban development with ₹1.5 lakh crore in interest-free loans to states for roads, industrial corridors, and market access. A PPP investment pipeline will be developed, supported by the India Infrastructure Project Development Fund. The ₹1 lakh crore Urban Challenge Fund will boost city redevelopment and sanitation, while Phase 2 of the Asset Monetization Plan aims to reinvest ₹10 lakh crore into new projects. The Jal Jeevan Mission extends to 2028 for universal tap water access, and urban sector reforms will enhance governance, municipal services, and planning.

The Budget 2025 strengthens agriculture with the PM Dhan-Dhaanya Krishi Yojana, focusing on productivity, irrigation, and credit access. The Rural Prosperity Program enhances skilling and investment in 100 agri-districts. A 6-year pulses mission aims for self-sufficiency, while the High-Yielding Seeds Mission promotes climate-resilient crops. A Makhana Board in Bihar will support farmers, and fisheries will see sustainable development in key coastal regions. The Cotton Productivity Mission boosts textile growth, and the Kisan Credit Card loan limit increases to ₹5 lakh. Additionally, a new urea plant in Assam will aid self-reliance in fertilizer production.

The Budget 2025 boosts the manufacturing and services sectors with several key initiatives. The MSME classification criteria are revised to support scaling, while credit guarantees for MSMEs and startups are enhanced to facilitate ₹1.5 lakh crore in additional credit. A Fund of Funds of ₹10,000 crore supports deep tech and emerging industries. The Footwear & Leather Sector will drive job creation, and India aims to become a global toy manufacturing hub. The National Manufacturing Mission focuses on advanced technologies and clean energy production. Additionally, a Food Processing Institute in Bihar and India Post will help rural economies. Efforts to revitalize the textile sector and promote digital transformation in services, alongside export promotion initiatives, aim to strengthen India’s global position.

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