Budget-2025: A Roadmap for economic growth and inclusive development

Mrs. Nirmala Sitharaman, Finance Minister of India, presented the Finance Bill 2025 (Union Budget 2025-26) in Parliament on February 1, 2025. This bill includes budget proposals for financial matters and direct/indirect taxation, primarily related to FY 2025-26/AY 2026-27.
Mrs. Nirmala Sitharaman, Finance Minister of India, presented the Finance Bill 2025 (Union Budget 2025-26) in Parliament on February 1, 2025. This bill includes budget proposals for financial matters and direct/indirect taxation, primarily related to FY 2025-26/AY 2026-27.

As the world continues to navigate post-pandemic recovery, technological advancements, and geopolitical shifts, Budget 2025 emerges as a critical blueprint for India’s economic future. Presented by the Finance Minister, this budget aims to strike a balance between growth, sustainability, and inclusivity. Let’s dive into the key highlights, implications, and potential impact of Budget 2025.

 


 

1. Economic Growth and Infrastructure Development

 

Budget 2025 places a strong emphasis on infrastructure development as a catalyst for economic growth. The government has allocated significant funds to:

    • National Infrastructure Pipeline (NIP): Expanding roads, railways, ports, and airports to improve connectivity and logistics.
    • Green Infrastructure: Investments in renewable energy projects, including solar, wind, and hydrogen energy, to achieve India’s net-zero emissions target by 2070.
    • Smart Cities: Accelerating the Smart Cities Mission with a focus on digital infrastructure and sustainable urban planning.

    These initiatives are expected to create jobs, boost private investment, and enhance India’s global competitiveness.


    2. Agriculture and Rural Economy

    Recognizing the importance of the agricultural sector, Budget 2025 introduces several measures to support farmers and rural development:

      • Doubling Farmers’ Income: Increased allocation for schemes like PM-KISAN and MSP-based procurement.
      • Agri-Tech Integration: Promoting the use of drones, AI, and IoT in farming to improve productivity and reduce losses.
      • Rural Employment: Expanding MGNREGA and introducing skill development programs to empower rural youth.

    These steps aim to ensure food security, reduce agrarian distress, and bridge the urban-rural divide.


    3. Taxation Reforms

    Budget 2025 brings a mix of relief and simplification in the tax regime:

      • Income Tax Slabs: Revised tax slabs to provide relief to middle-class taxpayers, with a focus on increasing disposable income.
      • Corporate Tax: Incentives for MSMEs and startups to encourage innovation and job creation.
      • GST Reforms: Simplification of GST processes and reduction of compliance burdens for small businesses.

    These reforms are expected to boost consumption, investment, and ease of doing business.

    Changes under the Income Tax Law in Union Budget 2025-26: In detail


    4. Digital India and Technology

    Building on the success of Digital India, Budget 2025 focuses on:

      • 5G Rollout: Accelerating the deployment of 5G infrastructure to enable faster internet and digital services.
      • AI and Blockchain: Investments in emerging technologies to drive innovation in sectors like healthcare, education, and finance.
      • Cybersecurity: Strengthening cybersecurity frameworks to protect digital assets and ensure data privacy.

    These initiatives aim to position India as a global leader in the digital economy.


    5. Healthcare and Education

    Budget 2025 prioritizes human capital development through:

      • Healthcare: Increased funding for Ayushman Bharat and the establishment of new medical colleges and hospitals.
      • Education: Focus on digital education, skill development, and research & development to prepare the workforce for future challenges.
      • Mental Health: Launching a national mental health program to address the growing need for psychological support.

    These measures aim to build a healthier, more skilled, and resilient population.


    6. Sustainability and Climate Action

    In line with global climate goals, Budget 2025 introduces:

      • Green Energy Transition: Incentives for electric vehicles, solar panels, and energy-efficient appliances.
      • Waste Management: Investments in waste-to-energy projects and plastic recycling initiatives.
      • Afforestation: Expanding green cover through large-scale afforestation programs.

    These steps underscore India’s commitment to sustainable development and environmental conservation.


    7. Social Welfare and Inclusivity

    Budget 2025 reaffirms the government’s commitment to social justice and inclusivity:

      • Women Empowerment: Increased funding for schemes like Beti Bachao Beti Padhao and maternity benefits.
      • SC/ST/OBC Welfare: Enhanced allocation for scholarships, skill development, and economic empowerment programs.
      • Senior Citizens: Expanding pension schemes and healthcare benefits for the elderly.

    These initiatives aim to create a more equitable and inclusive society.


    8. Defense and National Security

    To safeguard India’s sovereignty, Budget 2025 allocates:

      • Modernization of Armed Forces: Upgrading defense equipment and infrastructure.
      • Indigenous Manufacturing: Promoting “Make in India” in defense production to reduce dependency on imports.
      • Border Infrastructure: Strengthening infrastructure along border areas to enhance security and connectivity.

    Conclusion: A Budget for the Future

    Budget 2025 is a forward-looking document that addresses the needs of a rapidly evolving economy while staying rooted in the principles of sustainability and inclusivity. By focusing on infrastructure, technology, healthcare, and social welfare, it lays the foundation for a resilient and prosperous India.


    Union Budget 2025-26: In detail

    Source: Budget 2025-26

    Tax Reforms & Highlights in the Finance Budget 2025

     

    The budget features higher spending, job creation efforts, and tax relief for the middle class. Key tax changes include an increase in the Securities Transaction Tax (STT), cuts in short-term and long-term capital gains taxes, and the elimination of the angel tax. It also adjusts personal income tax slabs under the New Tax Regime.

    The Union Budget for FY 2024-25, presented by Finance Minister Nirmala Sitharaman, brings several significant changes aimed at boosting the economy, simplifying tax structures, and promoting sustainable growth.

     

    Here are the key highlights:

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    1. Revised Income Tax Slabs:

     

    Finance Minister Nirmala Sitharaman announced a thorough review of the Income Tax Act of 1961 to benefit the middle class, expected to be completed in six months.

    ➤ The new tax regime includes revised tax slabs:

    • No tax up to Rs 3 lakh income
    • Rs 3 -7 lakh 5 per cent
    • Rs 7-10 lakh 10 per cent
    •  Rs 10-12 lakh 15 per cent
    •  Rs 12-15 lakh 20 per cent
    •  Above Rs 15 lakh 30 per cent

    ➤ The Standard Deduction under the New Tax Regime increased from Rs 30,000 to Rs 75,000, saving Rs 17,500. The family pension deduction for pensioners rose from Rs 15,000 to Rs 25,000.

    Announcements for STT, Short-term and long term capital gains:

    ➤ Capital gains taxation has been streamlined with short-term gains reduced to 20% and long-term gains to 12.5% for specific assets. Capital gains tax will now also apply to unlisted bonds and debentures.

    ➤ The Securities Transaction Tax (STT) on option sales has increased from 0.0625% to 0.1%. The STT on futures and options (securities has been raised by 0.02% and 0.1%, respectively.

    ➤ The indexation benefit for immovable assets, like real estate, has been removed, meaning property sellers can no longer adjust their purchase price for capital gains tax. Although the long-term capital gains (LTCG) tax on immovable properties has been reduced from 20% to 12.5%, indexation benefits are no longer available.

    ➤ The TDS on e-commerce transactions has been reduced from 1% to 0.1%.

    ➤ The angel tax has been abolished for all investors…

    ➤ Employer NPS deduction increased from 10% to 14%.

    ➤ A new solution for NPS (Central Government employees) will be developed based on a review committee’s recommendations.

    Assessment Rules: Reopening and reassessment rules have been relaxed. Assessments can now be reopened beyond three years only if undisclosed income exceeds Rs 50 lakh, with a maximum reopening period of five years from the end of the assessment year.

    Indian Professionals: Indian professionals working for multinational companies will no longer face penalties for not reporting movable foreign assets, such as ESOPs, if their value is up to Rs 20 lakh.

    2. GST Updates

    The budget introduces several changes to the Goods and Services Tax (GST) framework. These include waivers of interest and penalties for non-fraudulent demands from FY 2017-18 to 2019-20, provided certain conditions are met. This move aims to ease compliance and reduce the burden on businesses.

    3. Fiscal Deficit and Economic Growth

    The fiscal deficit is projected to reduce to 4.9% of GDP, with a commitment to further decrease it to 4.5% in the coming years. This disciplined approach is expected to enhance investor confidence and ensure sustainable economic growth.

    4. Support for MSMEs and Startups

    The budget allocates substantial funds to support Micro, Small, and Medium Enterprises (MSMEs) and startups. New loan schemes and financial support initiatives are introduced to foster innovation and entrepreneurship, which are crucial for job creation and economic diversification

    5. Infrastructure Development

    Significant investments are planned for infrastructure projects, including transportation, energy, and digital infrastructure. These projects aim to improve connectivity, reduce logistics costs, and enhance the overall business environment.

    6. Agricultural Sector Boost

    The agricultural sector receives a major boost with increased funding for various schemes aimed at improving productivity, ensuring fair prices for farmers, and promoting sustainable farming practices

    7. Customs Duties and Capital Gains Tax

    The budget also includes changes in customs duties to promote domestic manufacturing and reduce dependency on imports. Rationalization of the capital gains tax structure to simplify the tax system and encourage investments.

    8. Corporate Tax:

    ➤ Reduction of the corporate income tax rate on foreign companies from 40 % to 35%.
    ➤ Introduction of measures to streamline transfer pricing assessment procedures.

    9. Angel Tax and Equalization Levy:

    ➤ Abolition of the angel tax to support innovation and startups.
    ➤ Repeal of the equalization levy to simplify the tax landscape.

    10. Reassessment Provisions:

    ➤ Simplification of reassessment provisions, allowing assessments to be reopened beyond three years, up to five years from the end of the year of assessment, only if the escaped income is more than ₹50 lakh.
    ➤ In search cases, the time limit for reassessment has been reduced from ten years to six years.

    11. Indirect Tax Procedures:

    ➤ Simplification of indirect tax procedures to reduce compliance burdens and improve efficiency.

    12. Vivad Se Vishwas Scheme:

    ➤ Introduction of the new Vivad Se Vishwas Scheme, 2024, for the settlement of pending direct tax disputes.

    Conclusion

    The Union Budget for FY 2024-25 reflects the government’s commitment to fostering economic growth, simplifying tax structures, and supporting key sectors. These measures are expected to create a more resilient and inclusive economy, benefiting all sections of society.

    Forex reserves increase by over $100 billion since March lockdown; hit lifetime high at $572 billion

    Amid a severe hit to the Indian economy by the Covid pandemic in the past eight months, the country’s foreign exchange reserves increased by more than $100 billion since the Covid-induced lockdown was enforced in March-end.

    From $469.9 billion in the week ended March 20, 2020, the forex reserves jumped by $102.8 billion to a lifetime high of $572.7 billion in the week ended November 13, 2020, according to the data released by the Reserve Bank of India.

    Importantly, the reserves grew by $4.277 billion from the week ended November 6, 2020. The jump was on account of Foreign Currency Assets (FCA), a major component of the country’s reserves, that increased by $5.526 billion to $530.2 billion from $524.7 billion in the preceding week.

    However, the gold reserves reduced by $1.233 billion from $37.587 billion to $36.354 billion in the week. On the other hand, the special drawing rights with the International Monetary Fund (IMF) were unchanged from the preceding week at $1.488 billion, the data showed.

    Foreign portfolio investors (FPI) have invested Rs 49,553 crore in Indian markets in November so far on the back of high liquidity along with improving global indicators and clarity after the US presidential elections, PTI reported.

    The investment stood at Rs 44,378 crore in equities and Rs 5,175 crore in the debt segment between November 3-20 while FPI’s October investment was Rs 22,033 crore.

    On the other hand, India saw its highest ever Foreign Direct Investment (FDI) during the first five months April-August of the current financial year. The total inflow was $35.73 billion, according to the Ministry of Commerce and Industry that was also 13 per cent up from the year-ago period.

    Meanwhile, bank credit grew 5.67 per cent to Rs 104.04 lakh crore in the fortnight ended November 6, 2020, according to the RBI data.

    The bank credit stood at Rs 98.46 lakh crore in the fortnight ended November 8, 2019. Moreover, deposits had jumped 10.63 per cent to Rs 143.80 lakh crore from Rs 129.98 lakh crore during the said period.

    Source: Financial Express

    SEBI extends deadline for filing April-June corporate financial results to September 15

    In a major relief to companies, the Securities and Exchange Board of India (SEBI) today extended the deadline for submission of financial results for the quarter, half-year, and financial year ended 30 June 2020 to September 15. The SEBI circular said that it has received representations requesting an extension of time for submission of financial results for the quarter or half year-ended 30 June 2020, due to the shortened time gap between the extended deadline for submission of financial results for the period-ended 31 March 2020 and the quarter or half year-ended June 30, 2020.

    Under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’), a listed entity is required to submit its quarterly, half-yearly, or annual financial results within 45 days or 60 days, as applicable, from the end of each quarter, half year, or financial year.

    Accordingly, listed entities were required to submit the financial results for the quarter, half-year-ended 30 June 2020 on or before 14 August 2020.

    Earlier, the regulatory body had also extended the timeline for submission of financial results by listed entities for the quarter, half-year, or financial year-ended 31 March 2020 to 31 July 2020, due to the impact of the coronavirus pandemic.

    SEBI further said that today’s announcement shall come into force with immediate effect and advised all stock exchanges to bring the provisions of this circular to the notice of all listed entities.

    It has asked the stock exchanges to bring the provisions of the circular to the notice of all listed entities and also disseminate on their websites.

    Meanwhile, SEBI’s move to relax the deadlines is expected to give more time to companies already struggling with operations part amid the pandemic.

    In-line with the efforts to provide relief to the sagging businesses, Finance Minister Nirmala Sitharaman earlier announced to decriminalise some offences under the Companies Act.

    The SEBI has also introduced new norms to give more fund-raising flexibility to stressed firms.

    The amendments can help promoters get financial investors on board without losing control of the company.

    Key changes notified in the ITR forms the Asst Year 2020-21

    The Central Board of Direct Taxes (CBDT) has notified new Income-tax Return (ITR) forms applicable for the Assessment Year 2020-21.

    CBDT notified Income Tax Return forms of FY 2020-21

    G.S.R. 338(E).— In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes has made the rules to amend the Income-tax Rules, 1962.

    The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended by the Income-tax (11th Amendment) Rules, 2020, vide notification number G.S.R. 329 (E) dated 28.5.2020.

    In essence, the following are the key changes:

    1. House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR4.
    1. Passport: One needs to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.
    1. Cash deposit: For those filing ITR 4-Sugam, it has been made compulsory to declare the amount deposited as cash in a bank account, if such amount exceeds Rs 1 crore during the FY.
    1. Foreign travel: If you have spent more than Rs 2 lakh on travelling abroad during the FY, you need to disclose the actual amount spent.
    1. Electricity consumption: If your electricity bills have been more than Rs 1 lakh in aggregate during the FY, you need to disclose the actual amount.
    1. Investment details: Details of investment qualifying for deduction under chapter VIA with bifurcation of details of investment made during the period from April 1, 2020 to June 30, 2020.
    2. A new schedule ‘Schedule DI’ has been inserted to claim benefit of investment/ deposit/payments made between 01-04-2020 to 30-06-2020 for the previous year 2019-20.

    Download the ITR Forms for Asst Year 2020-21

    Despite pandemic, Tamil Nadu attracts 17 investors worth Rs.15,128

    The companies which signed the MoUs are from Germany, Finland, Taiwan, France, South Korea, Japan, China, USA, Australia, UK

    As many as 17 MoUs’ to bring in fresh industrial investments worth Rs 15,128 crore into Tamil Nadu were signed between a host of foreign companies and the Tamil Nadu government in the presence of chief minister Edappadi K Palaniswami on Wednesday.

    These projects in areas such as commercial vehicle manufacture, electronics, footwear, information technology, medical equipment and energy are expected to generate 47,150 jobs in Tamil Nadu, an official release here said.

    The companies which signed the MoUs are from Germany, Finland, Taiwan, France, South Korea, Japan, China, USA, Australia, UK and the Netherlands, indicating that Tamil Nadu continues to be a destination for foreign direct investment (FDI).

    Palaniswami’s government has been taking a number of initiatives for economic revival.  They include appointment of a high-power committee of economic experts led by former RBI governor C Rangarajan to chalk out strategies in the medium-term, the Industrial Guidance Bureau facilitating single-window clearance of investment proposals, the recent policy announced to boost production of medical equipment and drugs in the wake of Covid-19 and TIDCO offering a Rs.102 crore package to meet working capital requirement of 799 MSMEs’, an official release said.

    The MoUs signed today include the following projects: Daimler India is to expand its commercial vehicle manufacturing at its Oragdam factory in Kancheepuram district involving an investment of Rs.2,277 crore, creating 400 more jobs.

    Finnish firm Salcomp will invest Rs.1,300 crore in the Nokia special economic zone in Sriperumbudur to manufacture mobile phone components, to generate 10,000 additional jobs in Kancheepuram district and this project would help to rejuvenate the Nokia SEZ in that district.

    The MoUs further include Rs. 900 crore investment by Japan’s Polymatech Electronics to make semiconductor chips at the Oragadam SIPCOT industrial park, a Rs.350 crore joint venture footwear manufacture project by Taiwan’s Chung Jye Company Ltd and Aston Shoes, a Rs.400 crore industrial park to be developed at Mappedu in Kancheepuram district by Australian firm, Lai Investment Manager Pvt Ltd., South Korea’s ‘Mando Automotive India  Pvt Ltd.  to invest Rs.150 crore in Pillaipakkam SIPCOT industrial park in Kancheepuram district, Netherlands’ Dinex to invest Rs.100 crore in the Mahindra City Industrial Park in Chengalpattu district for auto-components manufacture, a 750-mw gas-based power project at Ponneri in Thiruvallur district by Indo-UK joing venture, Chennai Power Generation Limited’ involving an investment of Rs.3,000 crore, and France’s IGL India Transplantations Solutions Ltd to invest Rs. 18 crore in medical equipment in SIPCOT park at Cheyyar in Tiruvannamalai district.

    Down south in Thoothukudi and Tirunelveli districts, a huge investment of Rs. 2,000 crore is envisaged by Vivid Solaire Energy Private Limited of France, to manufacture wind mills equipment, the release said. The USA’s HDCI Data Centre Holdings Chennai LLP will invest in an IT project in Ambattur in Chennai involving an investment of Rs. 2,800 crore, it said.

    While Singapore’s ST Tele Media will invest Rs. 1,500 crore in a new IT project in Chennai, wind mill components will be made by Germany’s Baetter in Chennai involving an investment of Rs.210 crore. Besides there, there are four more industrial investments in the pipeline in Kancheepuram, Thiruvallur and Chengalpattu districts including China’s ‘BYD India Private Ltd’, to invest Rs.50 crore in an electric vehicle manufacture project.

    Mahindra Origins in a JV with a Taiwanese company, TJR Precision Technology Company, will invest Rs.46 crore in making precision components at Ponneri. Further, USA’s Lincoln Electric will invest Rs.12 crore in an R & D Centre at Mahindra Industrial Park in Chengalpattu district, the release added.

    Top officials including Chief Secretary, Mr. K Shanmugam, Industries Secretary, N Muruganandam, State Guidance Bureau managing director, Ms. Karkala Usha, its executive director Mr. Aneesh Shekhar, and representatives of the various companies were among those who were present on the occasion.

    Source: Deccan Chronicle

    Google to invest in people and partnerships in India as it catches up with Azure, AWS in cloud

    Google will also leverage its advantage as a ‘data company’ and deploy technology as the key differentiator with expertise in areas such as Artificial Intelligence and Machine Learning

    Technology behemoth Google is investing heavily in people and partnerships to grab a larger share of the Indian Cloud market, as it takes on global rivals Microsoft, IBM and Amazon Web Services in the country, a top company executive said.

    Google will also leverage its advantage as a ‘data company’ and deploy technology as the key differentiator with expertise in areas such as Artificial Intelligence and Machine Learning, said Karan Bajwa, the newly appointed managing director of Google Cloud in India.

    “The technology is right. The brand is right. Google’s hiring great talent and putting the right people in front of the customers, and there’s very strong investments happening on the Google Cloud across the world, as well as in India,” Bajwa told ET.

    Only 20% of workloads have so far moved to the cloud and there is opportunity in the remaining 80% which has yet to migrate to public or private clouds, he said.

    The ongoing economic crisis unleashed by the Covid-19 pandemic will fast track the shift as more companies look at cost efficiencies, Bajwa said.

    Although IBM and Microsoft have a lead over Google in the cloud business, that was not a point of concern, he said.

    “For 80% of the companies, the journey will start now, so the fact that somebody is ahead and somebody is behind, I honestly don’t worry about it.”

    As capital becomes scarce going forward, people will want to conserve every dollar. “It’s going to move to an operational expense from a capital expenditure. So, there will be a faster acquisition of customers…,” he said.

    Google will build a “differentiated partner strategy” compared to rivals. It will also leverage on its huge reach due to its dominance of Search and areas like payments and advertising, he said.

    Over the last 60 days, “digital natives” have been looking to optimise existing technology, and companies that have so far not adopted the cloud are opening up to the opportunity due to cost pressures, he pointed out.

    “We’ve always seen that incumbency is a strong advantage, Google’s incumbency has built the business in most of these organizations where Google is helping these customers acquire new customers, get into new markets, grow revenues, grow margins, and that’s a very strong incumbency than anyone else,” Bajwa, who was earlier IBM India head and who has had a long stint with Microsoft as its MD of sales and marketing, said.

    Google will bet on building a team that wins top customers and competes with the dominant players, he said. “By the time we are done with Covid-19, we will be bringing on board very senior people from the industry who have led organizations and who have very strong credibility. That makes a huge difference as customers feel comfortable with the people they are buying from,” he said.

    Last week, Google appointed Microsoft veteran Anil Bhansali as vice president of engineering.

    Google already has a tie-up with Bharti Airtel for its cloud business and the search giant also recently announced a second cloud region in Delhi, after it launched the Mumbai region in 2017.

    “We would not be making these investments in the tens of billions of dollars if we did not think we would make money with customers,” Bajwa added.

    Source: Economic Times