The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, has introduced several bold reforms aimed at boosting economic growth, supporting the middle class, and strengthening key industries. Let’s explore the major highlights, along with an analysis of trends over the past few years.
1. Major Tax Reforms: A Big Win for the Middle Class
- No Income Tax for Incomes up to ₹12 Lakh: The exemption limit has been increased from ₹7 lakh to ₹12 lakh.
- Standard Deduction of ₹75,000: Effectively, those earning up to ₹12.75 lakh will pay no tax.
- Comparison with Previous Years:
- In 2021, the exemption limit was ₹5 lakh.
- 2025 sees the biggest jump to ₹12 lakh, providing major relief to salaried individuals.
Tax Trends Over the Years:
| Year | Exemption Limit | Standard Deduction |
|---|---|---|
| 2021 | ₹5 lakh | ₹50,000 |
| 2022 | ₹7 lakh | ₹50,000 |
| 2023 | ₹7 lakh | ₹50,000 |
| 2024 | ₹7 lakh | ₹50,000 |
| 2025 | ₹12 lakh | ₹75,000 |
2. Infrastructure Development: The Backbone of Growth
- ₹10.18 Lakh Crore allocated for roads, railways, and metro expansion.
- Investment in new airports, highways, and high-speed rail projects.
- New Expressways: The government announced a high-speed corridor connecting major economic hubs, reducing travel time drastically.
Infrastructure Spending (₹ Lakh Crore) Over the Years:
| Year | Infrastructure Spending |
|---|---|
| 2021 | ₹5.5 Lakh Crore |
| 2022 | ₹7.5 Lakh Crore |
| 2023 | ₹8.5 Lakh Crore |
| 2024 | ₹11.1 Lakh Crore |
| 2025 | ₹10.18 Lakh Crore |
3. Agriculture & Rural Economy
- Kisan Credit Card (KCC) limit raised from ₹3 lakh to ₹5 lakh.
- Agricultural Infrastructure: A new ₹20,000 crore fund to build cold storage units and modernize warehouses.
- Subsidies for Organic Farming: Encouragement for sustainable agricultural practices with increased government support.
Agriculture Budget Allocation (₹ Lakh Crore) Over the Years:
| Year | Agriculture Budget |
|---|---|
| 2021 | ₹1.5 Lakh Crore |
| 2022 | ₹1.9 Lakh Crore |
| 2023 | ₹2.2 Lakh Crore |
| 2024 | ₹2.5 Lakh Crore |
| 2025 | ₹2.8 Lakh Crore |
4. Social Security for Gig Workers
- Gig workers (Swiggy, Uber, Zomato) to receive health benefits and identity cards.
- Unemployment Insurance for Gig Workers: New provision ensures financial stability in case of job loss.
- Registered workers will be included under PM Jan Arogya Yojana (health insurance scheme).
5. Boost to the Electric Vehicle (EV) Industry
- 35 capital goods added for EV battery manufacturing exemption.
- Government EV Subsidies: More incentives for purchasing electric two-wheelers and commercial vehicles.
- Reduction in customs duty for essential EV components.
6. Healthcare Benefits: Cheaper Life-Saving Medicines
- 36 critical medicines, including cancer and diabetes drugs, are now tax-free.
- More AI-based diagnostic centers to improve early disease detection.
Healthcare Budget Trends (₹ Lakh Crore)
| Year | Healthcare Budget |
|---|---|
| 2021 | ₹1.2 Lakh Crore |
| 2022 | ₹1.6 Lakh Crore |
| 2023 | ₹2.0 Lakh Crore |
| 2024 | ₹2.4 Lakh Crore |
| 2025 | ₹2.9 Lakh Crore |
7. Women & Senior Citizen Benefits
- Higher interest rates on savings schemes for women and senior citizens.
- Tax Benefits for Working Women: Additional ₹50,000 deduction for women entrepreneurs.
- New pension benefits for elderly citizens.
8. India’s Startup Ecosystem Gets a Boost
- Tax exemptions for startups extended till 2026.
- Special AI & Robotics Fund: ₹10,000 crore allocated for fostering tech innovation.
- More funding for semiconductor manufacturing.
9. Sector-Wise Budget Allocation
| Year | Tax Exemption Limit (₹ Lakh) | Infrastructure Budget (₹ Lakh Crore) | Agriculture Budget (₹ Lakh Crore) | Healthcare Budget (₹ Lakh Crore) |
|---|---|---|---|---|
| 2021 | 5 | 5.5 | 1.5 | 1.2 |
| 2022 | 7 | 7.5 | 1.9 | 1.6 |
| 2023 | 7 | 8.5 | 2.2 | 2.0 |
| 2024 | 7 | 11.1 | 2.5 | 2.4 |
| 2025 | 12 | 10.18 | 2.8 | 2.9 |
Conclusion: A Budget for Growth and Inclusion
The Union Budget 2025 lays the foundation for higher economic growth, infrastructure development, tax relief, and welfare benefits. With record-breaking tax cuts, a massive boost to agriculture and healthcare, and a focus on digital innovation, the budget is expected to drive India’s economy forward in the coming years.
