While the end of January and beginning of February 2025 remained significant for tech enthusiasts and stock market experts due to the introduction of the Chinese AI model DeepSeek, the Union Budget 2025 in India jumped into the scene and created a buzz. Finance Minister of India, Nirmala Sitaraman presented the budget at the Indian Parliament on 01 February 2025.
The Union Budget is a crown of thorns for the Finance Ministers in India. Every year, the budget brings more criticism than appreciation to media personnel, experts, and common people in the country. However, the Union Budget 2025 was a little different from its previous versions.
Surprisingly, people have showered heaps of praise on Nirmala Sitaram after this budget. So, what is the reason behind the praise? Is this Union Budget 2025 as good as the public reactions? Let’s analyze the answers to these questions in the following section and understand the key aspects of this year’s budget.
1. Focus on Infrastructure Development
A high fund allocation in infrastructure is one of the significant aspects of the Union Budget 2025 in India. The government is keen to improve road and rail network connectivity across the country. At the same time, investment in key infrastructure projects will also boost the local economy of various places.
- Rural Infrastructure Boost: While urban infrastructure development is a priority, the government is all set to boost the country’s rural infrastructure at the same time. In rural infrastructure development, the government has stressed three crucial things: sanitization, water management, and roadway development.
- National Infrastructure Pipeline (NIP): The government is also keen on expanding the national infrastructure pipeline project to encourage electric mobility and green energy consumption.
- Smart Cities: PM Narendra Modi has always stressed smart city development. His vision can be reflected in this year’s budget as well. The government has allocated more funds to develop cities with smart utilities, technologies, and seamless public transportation.
2. Investment in Digital Innovation
Indian economy thrives on IT services, and a thriving IT industry requires the assistance of technologies and innovations. The Budget 2025 recognizes the importance of digital innovation and the transformative power of digital technologies in various sectors. In this year’s budget, the union government has focused on the following key aspects.
- Incentives for Startups: The Union Budget 2025 has introduced a series of grants, relief, and incentives for startups to encourage homegrown technologies.
- Cybersecurity: Maintaining data security is the key in today’s world. The Union Government of India is committed to maintaining top-notch cybersecurity to prevent sensitive data loss and theft of digital assets. A significant fund allocation can be noted in cybersecurity management in this year’s budget.
- Digital Literacy Mission: This year’s budget has also made key fund allocations to drive nationwide digital literacy programs to improve awareness and create jobs in the future.
3. Reforms in Individual and Corporate Taxation
The major reason why the Union Budget 2025 presented by the Indian Finance Minister has magnetized praises is the announcement of various tax reforms. From individual to corporate tax reforms, the budget has made an attempt to simplify the tax model for everyone.
- Income Tax Exemption: The budget has fetched a sigh of relief for the middle class since it has announced a tax exemption for salaried people earning up to 12 LPA.
- Incentives on Green Investments: The budget has also stressed green investments by offering tax incentives on renewable energy projects, green technologies, and electric vehicles.
- Business Taxation: The budget has introduced tax credits to benefit small enterprises and startups. At the same time, corporate tax has been reevaluated to make India a more business-friendly destination.
4. Health and Education Are Priorities
For any democratically elected government health and education are priorities. The Indian government-led by different parties and leaders has invested in health and education over time. However, India often draws criticism, because the country makes a low fund allocation in health and education. However, this year’s budget made an attempt to correct the country’s fund allocation in health and education. Though there is no drastic change in fund allocation, the following points can be highlighted as positives for these two sectors.
- National Health Mission: The government is committed to expanding its National Health Mission and made fund allocations accordingly in the last budget. The budget stressed digital health, preventive care, and healthcare access to the underserved region.
- Skill Development: The Indian government led by PM Modi has launched various programs that focus on youth skill development. The success of these programs has encouraged the government to allot higher funds for skill development. The key focus will be on data science, AI, and clean energy.
5. Support for the Agriculture Industry
Though IT service is a thriving industry in India, the country still depends a lot on farming and agriculture. The rural economy is driven by agriculture, and the government has planned to support this industry through this year’s budget.
- Direct Income Support: PM Kisan Yojna was launched to provide direct cash benefits to the farmers. This year’s budget has allocated funds to increase direct cash benefits to the farmers to boost financial security for people living in rural areas.
- Sustainable Initiatives: The government will provide financial aid and support to the farmers, who adapt to the sustainable initiatives. Adopting water-saving technologies and organic farming methods will be further encouraged.
6. Fund Allotment for Social Welfare
While the middle class benefits through income tax exemption, the low-income group will derive the benefits of social welfare schemes. The Government of India has launched several social welfare schemes to support financially backward people. In this year’s budget, gender equality, women’s health, and financial empowerment for women obtained the highest priority.
On the other hand, the government has also allotted more funds to financial inclusion programs. This will expand access to credit and banking systems. People can get easy loans to meet their emergency and luxury financial requirements.
Bottom Line
So, these are some of the key highlights of the Union Budget 2025 (India). Like every year, the budget brings happiness to many faces. At the same time, it brings disappointment to some people. Therefore, it is absolutely impossible to make everyone happy through a budget.
Going by social media buzz and narratives, the budget has brought fresh relief to the middle-class or salaried section of the country.
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