New Delhi, Feb 1: The Union Budget 2025-2026, presented on Saturday by Finance Minister Nirmala Sitharaman under Modi 3.0, reflects a continuation of the government’s efforts to accelerate growth with inclusive development, invigorate private sector investments, and enhance spending power of India’s rising middle class to give a fillip to aggregate demand in the economy.
FM Sitharaman has also succeeded in sticking to the fiscal consolidation path by bringing the fiscal deficit down to 4.4 per cent of GDP for 2025-26 from 4.8 per cent in 2024-25 while still maintaining a high capex of Rs 11.21 lakh crore for financing big infrastructure projects that spur growth and create jobs in the economy.
Highlighting this aspect at a post-budget press conference, she said: “There is no reduction in the public spending on capital expenditure in the Union Budget for 2025-26. We continue to place emphasis on the multiplier effect that capital expenditure done by the government has shown has sustained us.
We continue on that, and with all this, our fiscal prudence has been maintained.” The Budget proposes development measures focusing on the poor (Garib), the youth, farmers (Annadata) and women (Nari).
It also aims to initiate transformative reforms in taxation, power sector, urban development, mining, financial sector, and regulatory reforms to augment India’s growth potential and global competitiveness.
The Union Budget highlights that agriculture, MSME, investments, and exports are engines in the journey to Viksit Bharat using reforms as fuel, guided by the spirit of inclusivity, the Finance Minister said. Under the Prime Minister Krishi Yojana, a new initiative inspired by the success of the Aspirational District Programme, the government will launch an agricultural district programme in partnership with states.
This will target 100 districts with low productivity, moderate crop intensity, and below-average credit parameters. The initiative is expected to benefit 1.7 crore farmers, the Finance Minister said.
Announcing the ‘Mission for Cotton Productivity’, FM Sitharaman highlighted that the five-year mission will facilitate significant improvements in the productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties. She said the mission will benefit lakhs of cotton-growing farmers as the best of science & technology support will be provided to farmers.
Aligned with the government’s integrated 5F vision for the textile sector, the Minister remarked that the mission will help increase the incomes of the farmers as well as ensure a steady supply of quality cotton for rejuvenating India’s traditional textile sector.
Noting the importance of Kisan Credit Cards (KCC) in facilitating short-term loans for around 7.7 crore farmers, fishermen, and dairy farmers, the Minister announced the enhancement of loan limit under the Modified Interest Subvention Scheme from Rs 3 lakh to Rs 5 lakh for loans taken through the KCC.
These measures will go a long way in the uplift of the agriculture sector and strengthen its link with industry and exports to pave the way for income in rural India as part of inclusive growth. Similarly, the highest-ever allocation of Rs. 2,703.67 crores for the fisheries sector in the Budget comes as a booster shot to develop the country’s blue economy.
The Finance Minister, in her budget speech, highlighted India’s achievement as a leader in aquaculture and seafood exports. The budget announcement strategically focuses on enhancing financial inclusion, reducing the financial burden on farmers by reducing customs duties and furthering the development of the marine fisheries.
In a big boost to employment-led growth, the launch of the “National Manufacturing Mission” in the Budget to cover small, medium and large industries comes as a major driver for the ‘Make in India’ campaign.
The Mission will lay emphasis on five focal areas i.e. ease and cost of doing business; future-ready workforce for in-demand jobs; a vibrant and dynamic MSME sector; availability of technology; and quality products.
The Mission will also support Clean Tech manufacturing and aims to improve domestic value addition and build the ecosystem for solar PV cells, EV batteries, motors and controllers, electrolysers, wind turbines, very high voltage transmission equipment and grid-scale batteries, the Union Finance Minister added.
The Finance Minister also outlined measures for Labour-Intensive Sectors, adding that the government will undertake specific policy and facilitation measures to promote employment and entrepreneurship opportunities in labour-intensive sectors.
She specified that to enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The Finance Minister further informed that the scheme will support design capacity, component manufacturing, and machinery required for the production of non-leather quality footwear, besides the support for leather footwear and products.
The scheme is expected to facilitate employment for 22 lakh persons, generate a turnover of Rs 4 lakh crore and exports of over Rs 1.1 lakh crore. In addition, measures will be introduced for the toy sector, building on the National Action Plan for Toys.
A new scheme will aim to establish India as a global hub for toys, focusing on developing clusters, skills, and a manufacturing ecosystem that will produce high-quality, innovative, and sustainable toys, representing the “Made in India” brand, the Finance Minister said.
Sitharaman defined exports as the fourth engine of growth and said that jointly driven by the Ministries of Commerce, MSME, and Finance, the Export Promotion Mission will help MSMEs tap into the export market.
IANS