Analytical Overview of India's Budget 2025-2026

The Budget for 2025-2026, presented by Finance Minister Nirmala Sitharaman, underscores India's commitment to fostering inclusive growth, enhancing economic resilience, and positioning the country as a global economic powerhouse. The budget is built around four key engines: Agriculture, MSMEs, Investment, and Exports, with reforms serving as the fuel to drive these engines.

1. Accelerating Agricultural Growth

   The budget places a significant emphasis on the agricultural sector, recognizing it as the first engine of growth. Initiatives such as the Prime Minister Dhan-Dhaanya Krishi Yojana and the Mission for Aatmanirbharta in Pulses aim to boost productivity, enhance crop diversification, and ensure better credit availability for farmers. The focus on sustainable agriculture practices and post-harvest storage improvements reflects a forward-thinking approach to addressing the challenges faced by the agricultural sector.
   
   The 2025-2026 budget outlines a comprehensive strategy to boost the agricultural sector, positioning it as the primary engine of growth.
   
   Let's delve into the key initiatives and their implications:
   

   1. Prime Minister Dhan-Dhaanya Krishi Yojana

      This ambitious program focuses on developing 100 districts with low productivity, moderate crop intensity, and below-average credit parameters. It aims to:
      • Enhance agricultural productivity: By adopting modern agricultural techniques and improving crop yield.
      • Promote crop diversification: Encouraging farmers to grow a variety of crops to reduce dependency on a single crop.
      • Implement sustainable agriculture practices: Emphasizing environmentally friendly farming techniques.
      • Augment post-harvest storage: Improving storage facilities at panchayat and block levels to reduce post-harvest losses.
      • Improve irrigation facilities: Ensuring adequate water supply for crops through better irrigation infrastructure.
      • Facilitate credit availability: Providing long-term and short-term credit to farmers to enhance their financial stability.
         

   2. Mission for Aatmanirbharta in Pulses

      To achieve self-sufficiency in pulses, this mission focuses on:
      • Special emphasis on Tur, Urad, and Masoor: Boosting the production of these key pulses.
      • Central agencies' involvement: Agencies like NAFED and NCCF will procure these pulses from farmers for the next four years, ensuring a stable market and fair prices.
      • Development of climate-resilient seeds: Investing in research for seeds that can withstand adverse weather conditions.
      • Enhancing protein content: Improving the nutritional quality of pulses to meet dietary needs.
      • Improving post-harvest management: Implementing better storage and management practices to maintain the quality of pulses.
       

   3. Sustainable Agriculture Practices

      The budget highlights the importance of sustainable agriculture practices, which include:
      • Promoting organic farming: Encouraging the use of organic fertilizers and pesticides to reduce environmental impact.
      • Adopting precision farming: Utilizing technology to optimize the use of resources like water, fertilizers, and pesticides.
      • Enhancing soil health: Implementing measures to improve soil fertility and prevent degradation.
       

   4. Post-Harvest Storage Improvements

      To tackle post-harvest losses, the budget proposes:
      • Building modern storage facilities: Setting up warehouses and cold storage units to preserve the quality of produce.
      • Strengthening supply chains: Developing efficient logistics and transportation networks to reduce transit losses.
      • Encouraging farmer producer organizations (FPOs): Supporting FPOs to manage post-harvest operations and ensure better market access for farmers.
   These initiatives reflect a forward-thinking approach to addressing the challenges faced by the agricultural sector. By focusing on productivity, sustainability, and financial support, the budget aims to create a robust and resilient agricultural economy.
    

2. Empowering MSMEs:

   Micro, Small, and Medium Enterprises (MSMEs) are identified as the second engine of growth. With revised classification criteria and enhanced credit availability, the budget aims to bolster the MSME sector's role in driving employment and economic growth. Initiatives such as customized credit cards for micro enterprises and the establishment of a new Fund of Funds for startups are steps towards empowering entrepreneurs and fostering innovation.
   
   In the 2025-2026 budget, Finance Minister Nirmala Sitharaman underscores the importance of Micro, Small, and Medium Enterprises (MSMEs) as the second engine of growth, critical for India's economic expansion and job creation.
   
   Here's a detailed look at the initiatives aimed at empowering the MSME sector:
   

   1. Revised Classification Criteria

      • Investment and Turnover Limits: The investment and turnover limits for classification of MSMEs have been revised to encourage growth and scalability.
      • Micro Enterprises: Investment limit increased from ₹1 crore to ₹2.5 crore; turnover limit from ₹5 crore to ₹10 crore.
      • Small Enterprises: Investment limit increased from ₹10 crore to ₹25 crore; turnover limit from ₹50 crore to ₹100 crore.
      • Medium Enterprises: Investment limit increased from ₹50 crore to ₹125 crore; turnover limit from ₹250 crore to ₹500 crore.
         

   2. Enhanced Credit Availability

      • Credit Guarantee Cover: The credit guarantee cover for MSMEs will be significantly enhanced:
        • For Micro and Small Enterprises, from ₹5 crore to ₹10 crore, resulting in an additional ₹1.5 lakh crore of credit over the next five years.
        • For Startups, the cover will be increased from ₹10 crore to ₹20 crore, with a moderated guarantee fee for loans in 27 focus sectors critical for Atmanirbhar Bharat.
        • For well-run exporter MSMEs, term loans up to ₹20 crore will be supported by the guarantee cover.
           

   3. Customized Credit Cards for Micro Enterprises

      • Micro Enterprises Credit Cards: Introduction of customized credit cards with a limit of ₹5 lakh for micro enterprises registered on the Udyam portal. This initiative will support approximately 10 lakh micro enterprises in its first year, facilitating easier access to working capital and financial stability.
         

   4. Fund of Funds for Startups

      • New Fund of Funds: Establishment of a new Fund of Funds with an expanded scope and an additional government contribution of ₹10,000 crore. This fund aims to support startup initiatives, fostering innovation and entrepreneurship across various sectors.
         

   5. Scheme for First-time Entrepreneurs

      • Support for Women, Scheduled Castes, and Scheduled Tribes: A new scheme providing term loans up to ₹2 crore for five lakh first-time women, Scheduled Castes, and Scheduled Tribes entrepreneurs over the next five years. This scheme builds on the success of the Stand-Up India scheme and includes online capacity building for entrepreneurship and managerial skills.
         

   6. Measures for Labour-Intensive Sectors

      • Focus on Employment and Entrepreneurship: Specific policy measures will be undertaken to promote employment and entrepreneurship opportunities in labour-intensive sectors, ensuring sustainable economic development and job creation.
         

   7. Focus Product Scheme for Footwear and Leather Sectors

      • Enhancing Competitiveness: Implementation of a focus product scheme to support design capacity, component manufacturing, and machinery for both leather and non-leather footwear. This scheme is expected to facilitate employment for 22 lakh individuals, generating a turnover of ₹4 lakh crore and exports of over ₹1.1 lakh crore.
         

   8. Support for Toy Sector

      • Global Hub Initiative: Building on the National Action Plan for Toys, a scheme will be implemented to develop clusters, skills, and a manufacturing ecosystem for high-quality, innovative, and sustainable toys that represent the 'Made in India' brand.
         

   9. Support for Food Processing

      • National Institute of Food Technology: Establishment of a National Institute of Food Technology, Entrepreneurship, and Management in Bihar, focusing on enhancing farmer income through value addition and providing skilling, entrepreneurship, and employment opportunities for youth.
         

   10. Manufacturing Mission - Furthering "Make in India"

       • Policy Support and Framework: A National Manufacturing Mission will be set up to further "Make in India," providing policy support, execution roadmaps, and a governance and monitoring framework for central ministries and states. Clean Tech manufacturing will also be supported, focusing on solar PV cells, EV batteries, and other sustainable technologies.
   These initiatives reflect a holistic approach to empowering the MSME sector, fostering innovation, enhancing productivity, and driving economic growth. The budget's focus on MSMEs underscores their critical role in shaping India's future as a global economic leader.
    

3. Strategic Investments in People and the Economy

   Investment, as the third engine, encompasses initiatives across various domains. From Saksham Anganwadi and Poshan 2.0 for nutritional support to the expansion of capacity in IITs and medical education seats, the budget prioritizes investing in people. The focus on infrastructure development, public-private partnerships, and urban sector reforms underscores the government's commitment to creating a robust economic framework.
   
   The 2025-2026 budget acknowledges the critical importance of investing in both the populace and the broader economy as integral for sustainable growth.
   
   

   Here's an in-depth look at the various initiatives:

   1. Saksham Anganwadi and Poshan 2.0

      • Nutritional Support: This program aims to provide essential nutritional support to over 8 crore children, 1 crore pregnant women and lactating mothers, and about 20 lakh adolescent girls, particularly focusing on aspirational districts and the north-east region.
      • Enhanced Cost Norms: The budget includes provisions to enhance cost norms for nutritional support, ensuring that the allocated resources adequately meet the needs of beneficiaries.
         

   2. Atal Tinkering Labs

      • Cultivating Innovation: Fifty thousand Atal Tinkering Labs will be established in government schools over the next five years to foster curiosity, innovation, and a scientific temper among young minds.
      • Hands-On Learning: These labs will provide students with the tools and space to engage in hands-on learning, encouraging creativity and problem-solving skills.
         

   3. Broadband Connectivity to Government Secondary Schools and PHCs

      • Digital Inclusion: Broadband connectivity will be extended to all government secondary schools and primary health centers in rural areas under the Bharatnet project.
      • Improved Access: This initiative aims to bridge the digital divide, enhancing access to information and educational resources.
         

   4. Bharatiya Bhasha Pustak Scheme

      • Digital Education: This scheme will provide digital-format Indian language books for school and higher education, helping students understand their subjects better and promoting linguistic diversity.
      • Inclusive Learning: By making educational materials available in regional languages, the scheme aims to support students in better comprehending their curriculum.
         

   5. National Centres of Excellence for Skilling

      • Global Expertise: Five National Centres of Excellence for skilling will be set up with global expertise and partnerships to equip youth with the skills required for "Make for India, Make for the World" manufacturing.
      • Comprehensive Training: These centers will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews.
         

   6. Expansion of Capacity in IITs

      • Increased Enrollment: The number of students in the 23 IITs has doubled from 65,000 to 1.35 lakh in the past decade. The budget includes provisions to create additional infrastructure in the 5 IITs started after 2014, facilitating education for an additional 6,500 students.
      • Support Infrastructure: Expansion of hostel and other infrastructure capacity at IIT, Patna, is also part of the plan.
         

   7. Centre of Excellence in AI for Education

      • Advanced Learning: Following the establishment of three Centres of Excellence in AI for agriculture, health, and sustainable cities in 2023, a new Centre of Excellence in AI for education will be set up with a total outlay of ₹500 crore.
      • AI Integration: This center will focus on integrating artificial intelligence into educational practices, enhancing learning outcomes.
         

   8. Expansion of Medical Education

      • Medical Seats: The government has added almost 1.1 lakh UG and PG medical education seats over the past decade, an increase of 130%. The budget aims to add 10,000 additional seats in the next year and 75,000 seats over the next five years.
      • Healthcare Access: These expansions will contribute to better healthcare access and a more robust medical workforce.
         

   9. Day Care Cancer Centres in District Hospitals

      • Cancer Treatment: The government will facilitate the establishment of Day Care Cancer Centres in all district hospitals within the next three years, with 200 centers set up in 2025-26.
      • Accessible Care: This initiative aims to make cancer treatment more accessible and reduce the burden on larger hospitals.
         

   10. Strengthening Urban Livelihoods

       • Urban Poor Support: A scheme for the socio-economic upliftment of urban workers will be implemented to help them improve their incomes, secure sustainable livelihoods, and enhance their quality of life.
       • PM SVANidhi: Building on the success of the PM SVANidhi scheme, which has benefitted over 68 lakh street vendors, the revamped scheme will offer enhanced loans from banks, UPI-linked credit cards with a ₹30,000 limit, and capacity-building support.
          

   11. Social Security Scheme for Online Platform Workers

       • Gig Worker Support: Recognizing the contributions of gig workers, the government will provide healthcare under the PM Jan Arogya Yojana, identity cards, and registration on the e-Shram portal to nearly 1 crore gig-workers.
          

   12. Public-Private Partnership in Infrastructure

       • Project Pipeline: Each infrastructure-related ministry will prepare a 3-year pipeline of projects that can be implemented in PPP mode, with states encouraged to do the same.
       • Capital Expenditure: An outlay of ₹1.5 lakh crore is proposed for 50-year interest-free loans to states for capital expenditure and incentives for reforms.
          

   13. Asset Monetization Plan 2025-30

       • New Projects: The second Asset Monetization Plan for 2025-30 will be launched to reinvest ₹10 lakh crore in new projects, with regulatory and fiscal measures fine-tuned to support the plan.
          

   14. Jal Jeevan Mission

       • Water Supply: The Mission aims to provide 100% coverage of potable tap water connections by 2028, focusing on infrastructure quality and O&M of rural piped water supply schemes through "Jan Bhagidhari."
          

   15. Urban Sector Reforms

       • Governance and Services: Reforms related to urban governance, municipal services, urban land, and planning will be incentivized to build on previous proposals.
       • Urban Challenge Fund: A ₹1 lakh crore fund will finance up to 25% of bankable projects' costs, with at least 50% of the cost funded from bonds, bank loans, and PPPs.
          

   16. Power Sector Reforms

       • Electricity Distribution: Reforms and augmentation of intra-state transmission capacity will be incentivized, improving the financial health and capacity of electricity companies.
       • Additional Borrowing: States will be allowed an additional borrowing of 0.5% of GSDP contingent on these reforms.
          

   17. Nuclear Energy Mission for Viksit Bharat

       • Energy Transition: A mission to develop at least 100 GW of nuclear energy by 2047, with amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to encourage private sector participation.
       • R&D for SMRs: A Nuclear Energy Mission with an outlay of ₹20,000 crore for research and development of Small Modular Reactors (SMRs), aiming to operationalize at least 5 indigenous SMRs by 2033.
   These initiatives demonstrate the government's holistic approach to investing in people and the economy, aiming for long-term, sustainable growth and development.
    

4. Boosting Exports

   The budget's fourth engine, exports, is driven by initiatives such as the Export Promotion Mission and the development of BharatTradeNet. By facilitating easy access to export credit and supporting MSMEs in tackling non-tariff measures, the government aims to integrate India more deeply into global supply chains and enhance the country's export capabilities.
   
   The 2025-2026 budget recognizes exports as a vital engine of growth for India's economy. Here's an in-depth analysis of the initiatives aimed at enhancing the country's export capabilities:
   

   1. Export Promotion Mission

      • Sectoral and Ministerial Targets: The mission will involve a collaborative effort between the Ministries of Commerce, MSME, and Finance to set and achieve specific export targets across various sectors.
      • Export Credit: The mission aims to facilitate easy access to export credit through streamlined processes and financial support mechanisms. This will help exporters, especially MSMEs, to secure the necessary funds to expand their operations and enter new markets.
      • Cross-Border Factoring Support: By providing support for cross-border factoring, the mission will help exporters manage their receivables and mitigate the risks associated with international trade.
      • Tackling Non-Tariff Measures: The mission will offer assistance to MSMEs in navigating and overcoming non-tariff measures imposed by overseas markets, ensuring that Indian products comply with international standards and regulations.
         

   2. BharatTradeNet (BTN)

      • Unified Platform: BharatTradeNet will be developed as a digital public infrastructure for international trade, serving as a unified platform for trade documentation and financing solutions. This platform will integrate various trade-related processes, making it easier for exporters to manage their documentation and transactions.
      • Alignment with International Practices: BTN will be aligned with global trade practices, ensuring that Indian exporters can seamlessly engage with international partners and comply with international trade requirements.
         

   3. Integration with Global Supply Chains

      • Domestic Manufacturing Capacities: The budget emphasizes the development of domestic manufacturing capacities to enhance India's integration with global supply chains. By identifying and supporting key sectors, the government aims to strengthen India's position as a critical player in the global market.
      • Facilitation Groups: The government will form facilitation groups comprising senior officers and industry representatives for select products and supply chains. These groups will work to identify opportunities, address challenges, and support the development of robust supply chains.
      • Industry 4.0 Opportunities: The budget highlights the significant opportunities presented by Industry 4.0, which requires high skills and talent. The government will support the domestic electronic equipment industry to leverage these opportunities, benefiting the youth and fostering innovation.
         

   4. National Framework for Global Capability Centres (GCC)

      • Emerging Tier 2 Cities: A national framework will be developed to guide states in promoting Global Capability Centres in emerging tier 2 cities. The framework will focus on enhancing talent availability, infrastructure development, building by-law reforms, and mechanisms for collaboration with industry.
         

   5. Warehousing Facility for Air Cargo

      • Infrastructure Upgradation: The government will facilitate the upgradation of infrastructure and warehousing facilities for air cargo, including high-value perishable horticulture produce. This will ensure that Indian exporters can efficiently store and transport their goods, maintaining their quality and reducing spoilage.
      • Streamlined Protocols: Cargo screening and customs protocols will be streamlined and made user-friendly to expedite the processing of air cargo and reduce delays.
         
   These initiatives reflect a strategic approach to boosting exports, enhancing the competitiveness of Indian products in the global market, and integrating India more deeply into global supply chains. By focusing on credit facilitation, infrastructure development, and regulatory support, the government aims to create a conducive environment for exporters and drive economic growth.

Reforms as the Catalyst

Reforms are highlighted as the crucial fuel that will drive the engines of growth. Tax reforms, financial sector reforms, and regulatory reforms are designed to enhance ease of doing business and foster a more conducive environment for economic activities. The proposed High-Level Committee for Regulatory Reforms and the introduction of the Investment Friendliness Index of States are notable measures aimed at strengthening economic governance.

Fiscal Prudence

The budget maintains a focus on fiscal prudence, with a commitment to keeping the fiscal deficit on a declining path. The detailed roadmap for fiscal consolidation reflects the government's intent to balance growth aspirations with financial discipline. The proposed new income-tax bill, aimed at simplifying the tax code and reducing litigation, is a significant step towards enhancing tax governance.

Conclusion
The Budget 2025-2026 lays down a comprehensive roadmap for India's economic journey towards Viksit Bharat. By focusing on inclusive growth, strategic investments, and structural reforms, the government aims to unlock the nation's potential for sustained prosperity and global leadership. The budget's multifaceted approach, addressing both immediate needs and long-term goals, positions India on a path of resilient and balanced development.

In summary, the Budget 2025-2026 is not just a financial plan; it is a visionary document that outlines a comprehensive roadmap for India's journey towards becoming a developed nation. By focusing on inclusive growth, strategic investments, and structural reforms, the government aims to unlock the nation's potential, driving sustained prosperity and global leadership. This multifaceted approach ensures that India is on a path of resilient and balanced development, ready to meet the challenges of the future and achieve its aspirations for Viksit Bharat.