India’s Finance Minister Nirmala Seetharaman presented her eighth consecutive budget on February 1, 2025 focused on augmenting the country’s growth potential and global competitiveness.
Through transformative reforms across the domains of taxation, power sector, urban development, mining, financial sector and regulatory reforms while empowering the four engines of development, namely, agriculture, MSMEs, investments and exports, the government is committed to achieving its aspiration of Viksit Bharat.
- Income Tax Slab Revisions
Among the key announcements in the Budget is the restructuring of income tax slabs under the new tax regime that could potentially result in salaried individuals not having to pay any income tax up to an income of INR 12.75 lakhs if exemptions are availed.
According to the the revisions, the following tax slabs will be effective from FY25-26:
| Total Income |
Rate of Tax |
| Up to 4,00,000 |
Nil |
| From 4,00,001 to 8,00,000 |
5 per cent |
| From 8,00,001 to 12,00,000 |
10 per cent |
| From 12,00,001 to 16,00,000 |
15 per cent |
| From 16,00,001 to 20,00,000 |
20 per cent |
| From 20,00,001 to 24,00,000 |
25 per cent |
| Above 24,00,000 |
30 per cent |
Source: Finance Minister’s Budget Speech
There have been a slew of measures towards development of agriculture as it is being considered as the first engine of growth. Announcements include a Pradhan Mantri Dhan Dhaanya Krishi Yojana which will see the consolidation of existing schemes to create an agri district programme covering 100 districts with low productivity, moderate crop intensity and below-average credit parameters. By enabling enhanced agricultural productivity; ensuring availability of credit; encouraging adoption of sustainable practices and augmenting post-harvest storage, and improving irrigation facilities, the programme aims to help over 1.7 crore farmers. Other schemes include achieving atmanirbharta in oil seeds and pulses, among other things.
Acknowledging the role of MSMEs in helping position India as a global manufacturing hub, the finance minister announced the enhancement of the investment and turnover limits for classification of all MSMEs by 2 and 2.5 times respectively. “This will give them the confidence to grow and generate employment for our youth,” the minister stated.
Along with this, the credit guarantee cover for various types of organizations has also been enhanced. It has gone up to INR 10 crore for micro and small enterprises; to INR 20 crores for start-ups along with the fee being moderated to 1 per cent for loans in 27 focus sectors; and for well-run exporter MSMEs for term loans up to INR 20 crores.
A new scheme providing term loans up to INR 2 crores to first-time entrepreneurs for over 5 lakh women and those belonging to Scheduled Castes and Scheduled Tribes has also been announced.
Significant investments in the education sector have been announced in this budget. From expansion in the capacity of IITs and in medical education to setting up of a Centre of Excellence in Artificial Intelligence for education and enhancing cost norms for the country’s nutritional support programs (Saksham Anganwadi and Poshan 2.0), the government is looking to invest in the country’s people.
Similarly, through a series of announcements around reforms in the financial sector, tax and regulatory reforms, ease of doing business, and indirect tax proposals, the government has clearly outlined the path that it is set to take towards its destination of a Viksit Bharat with inclusivity as a guiding principle and reforms as the fuel.
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