Finance Minister Nirmala Sitharaman tabled the Union Budget 2025 in Parliament today, Sitharaman said that the engines of development are Agriculture, MSMEs, Investment, and Exports.
Further to Prime Minister’s goal of “Viksit Bharat by 2047” to achieve, the aspirations are to accelerate growth, Secure Inclusive Development, Enhance Spending Power Of India’s Rising, Middle Class, Invigorate Private Sector Investments, and Uplift Household Sentiments.
Detailing below the top announcements from Sitharaman’s second shortest budget speech of 74 minutes that matter to finance sector:
Capital Expenditure & Fiscal Deficit: Starting with capex, the government has allocated Rs 10.47 lakh crore for capital expenditure in FY26, reinforcing infrastructure-led growth. Capex allocation for FY25 was Rs 11.11 Lakh Crore. The fiscal deficit is estimated at 4.8 per cent of GDP in the revised estimates for FY25, indicating a path of fiscal prudence.
This aligns with the government’s commitment to bringing the deficit below 4.5% by FY26, as outlined under the Fiscal Responsibility and Budget Management (FRBM) Act.
MSMEs and Startups: To empower small businesses, the government has introduced customized credit cards with a Rs 5 lakh limit for micro enterprises registered on the Udyam portal. A new loan scheme will provide Rs 2 crore term loans for five lakh first-time entrepreneurs, with a special focus on women, SC, and ST groups. The credit guarantee limits for MSMEs and startups have been significantly increased, with MSMEs now eligible for loans up to Rs 10 crore and startups up to Rs 20 crore. Exporter MSMEs can also avail term loans up to Rs 20 crore with government-backed guarantees.
By providing a longer window for tax incentives, the move is expected to encourage more entrepreneurs to enter the market, particularly in sectors with high growth potential.
100% FDI for Insurance: The government has raised the Foreign Direct Investment (FDI) limit in the insurance sector from 74 per cent to 100 per cent. This move is expected to attract more foreign capital, enhance competition, and improve the availability of insurance products in India. Ministry of Finance proposed this amendment in November 2024.
100% FDI in the Insurance sector – The Economic Survey 2025 has highlighted that the insurance market in India has continued its upward trajectory with the total insurance premium grew by 7.7% in FY24, reaching Rs 11.2 lakh crore.
Infrastructure Financing: To strengthen infrastructure funding, the National Bank for Financing Infrastructure and Development (NaBFID) will establish a Partial Credit Enhancement Facility. This initiative will encourage investment in corporate bonds, providing long-term capital for infrastructure projects.Financial Inclusion and Compliance Reforms: A Grameen Credit Score system will be introduced to assess the financial health of Self-Help Group (SHG) members in rural India, ensuring better access to credit. Additionally, a revamped Central KYC registry will be launched in 2025 to streamline financial compliance and improve accessibility for individuals and businesses.
Regulatory Reforms for Ease of Doing Business: The government has announced multiple regulatory reforms to improve the business environment. A High-Level Committee on Regulatory Reforms will be set up, and an Investment Friendliness Index will be introduced to rank states based on their regulatory efficiency. The Financial Stability and Development Council (FSDC) will evaluate financial regulations, while the Jan Vishwas Bill 2.0 aims to decriminalize over 100 legal provisions, reducing compliance burdens for businesses.
Union Budget 2025 LIVE Updates: Union Finance Minister Nirmala Sitharaman presented her 8th Budget on Saturday, marking a record for the most consecutive presentations in India’s history. Key highlights included enhanced Kisan credit card limits, a new fund for MSMEs, and the launch of the PM Dhan Dhaanya Krishi Yojana. Read the article to get all the updates on Union Budget 2025:
Tax Reforms and Relief for Taxpayers: One of the major announcements in the budget is the increase in the income tax exemption limit to Ts 12 lakh, providing relief to middle-class taxpayers. For senior citizens, the tax deduction limit has been raised from Rs 50,000 to Rs 1 lakh. The TDS exemption limit on rent has also been increased from Rs 2.4 lakh to Rs 6 lakh. Additionally, taxpayers will now have four years instead of two to file updated tax returns. Homeowners will benefit from a new provision allowing them to claim tax benefits on two self-occupied properties without restrictions.
Rationalisation of Customs Duties and Export Incentives: To promote trade and ease the cost of doing business, the government has removed seven tariff rates to simplify customs duties. Export incentives include duty-free provisions for the handicraft and leather industries and tax exemptions on capital goods in sectors like electronics and electric vehicles, supporting domestic manufacturing.
Kisan Credit Card: The loan limit under the Kisan Credit Card (KCC) scheme will be increased from Rs 3 lakh to Rs 5 lakh under the Modified Interest Subvention Scheme for loans taken through KCC.
