On February 2, 2025, Union Finance Minister Nirmala Sitharaman presented the Union Budget for 2024-25, offering significant tax relief for the salaried class and a strong push for manufacturing growth. The budget also prioritized boosting household savings and consumption through various measures, including no income tax on monthly incomes up to Rs 1 lakh, with income tax exemptions extending up to Rs 12.75 lakh for the salaried class.
In addition to these tax benefits, the government emphasized its commitment to four key sectors: agriculture, MSMEs (Micro, Small, and Medium Enterprises), investment, and exports. Sitharaman announced the ‘Prime Minister Dhan-Dhaanya Krishi Yojana,’ aimed at improving agricultural productivity in 100 districts. She also unveiled a special ‘Mission for Aatmanirbharta in Pulses’ focusing on essential crops like tur, urad, and masoor.
For fiscal management, the Finance Minister projected a fiscal deficit of 4.8% for FY-25, with a goal to reduce it to 4.4% by FY-26. She also introduced measures to boost MSMEs, including an increase in credit guarantees from Rs 5 crore to Rs 10 crore.
In line with the ‘Make in India’ initiative, Sitharaman launched the National Manufacturing Mission, which will focus on strengthening industries across all scales. The government will also establish 50,000 Atal Tinkering Labs in schools over the next five years and invest Rs 500 crore into a Centre of Excellence in Artificial Intelligence for education.
Gig workers were a focus of Sitharaman’s speech, with plans to issue identity cards and integrate them into the e-Shram portal. These workers will also benefit from healthcare under the PM Jan Arogya Yojana. Additionally, a Rs 1 lakh crore Urban Challenge Fund was announced to develop cities into hubs of growth, and a modified Udan scheme will increase regional connectivity to 120 new destinations.
The Finance Minister also detailed plans to increase Foreign Direct Investment (FDI) limits in the insurance sector from 74% to 100%, and introduced the Jan Vishwas Bill 2.0 aimed at decriminalizing over 100 provisions in various laws.
On the nuclear front, Sitharaman revealed a Rs 20,000 crore Nuclear Energy Mission, which includes the development of Small Modular Reactors (SMRs) to contribute to India’s goal of generating 100 gigawatts of nuclear energy by 2047. This mission is aligned with the government’s vision of a “Viksit Bharat” (developed India).
Other key measures included a revamped PM SVANidhi scheme to provide enhanced loans and UPI-linked credit cards to street vendors, along with an increase in the threshold for Tax Deduction at Source (TDS) on rent from Rs 2.40 lakh to Rs 6 lakh per annum.
Sitharaman also proposed expanding the list of lifesaving drugs exempted from Basic Customs Duty and allocated Rs 11.21 lakh crore for capital expenditure, marking a 0.9% increase from last year’s budget estimate.
The budget drew praise from industry leaders who called it progressive, and Sitharaman received warm greetings from BJP members and allies, with Prime Minister Narendra Modi congratulating her in Parliament.
However, opposition parties, including Congress and Trinamool Congress, were critical of the budget. Congress leader P Chidambaram slammed the government for continuing on a “worn-out path,” accusing the administration of ignoring the advice of the Chief Economic Advisor on deregulation. He predicted that the economy would grow at a modest 6 to 6.5% in the upcoming fiscal year.
Trinamool Congress leader Abhishek Banerjee called the budget a political document aimed at securing votes in Bihar, while neglecting the needs of Bengal. The party also criticized the budget for neglecting the poor, failing to ensure balanced growth, and disregarding federal principles.
As the debate continues, the Union Budget sets the stage for both optimism and opposition in the run-up to the next fiscal year.
