Union Budget 2025: Key Highlights

and Impact on the Indian Economy

The Union Budget 2025, presented by the Finance Minister, outlines a comprehensive roadmap for economic growth, fiscal discipline, and sectoral development. With a strong focus on tax reforms, infrastructure, social welfare, and investment, this budget aims to drive India’s self-reliance (Aatmanirbhar Bharat) and economic resilience in a rapidly changing global landscape.

This article breaks down the key highlights of the Union Budget 2025 and its impact across various sectors. Download our special report here for an in-depth analysis of the budget’s implications for businesses, industries, and individuals.

1. Tax Reforms: Relief for Individuals & Businesses

One of the most significant takeaways from the Union Budget 2025 is the increase in the income tax exemption limit under the new tax regime.

Income tax exemption was raised from ₹7 lakh to ₹12 lakh per annum to relieve middle-class taxpayers.
Reduced corporate tax from 22% to 20% to encourage business expansion and job creation.
GST simplification for MSMEs, reducing the tax burden and compliance costs.
Customs duty exemptions on 36 life-saving medicines to make healthcare more affordable.

These measures are expected to increase disposable income, boost domestic consumption, and promote business-friendly policies.

2. Agriculture & Rural Development: Empowering Farmers

The agriculture sector remains a top priority in Budget 2025, with new schemes aimed at boosting productivity, improving irrigation, and ensuring financial stability for farmers.

PM Dhan-Dhaanya Krishi Yojana launched to enhance agricultural output in 100 low-productivity districts.
Mission for Aatmanirbharta in Pulses to make India self-reliant in Tur, Urad, and Masoor production.
₹25,000 crore allocated for expanding irrigation facilities and post-harvest infrastructure.

These reforms will help modernize agriculture, reduce dependency on imports, and provide better price realization for farmers.

3. MSME & Startup Support: Fueling Innovation & Growth

Small and Medium Enterprises (MSMEs) and startups received a major boost in credit access, digital integration, and regulatory ease.

Credit guarantee limit for MSMEs increased from ₹5 crore to ₹10 crore.
National Manufacturing Mission introduced to support domestic manufacturing and exports.
Single-window digital platform launched for MSME approvals and financing.

These initiatives will empower entrepreneurs, create jobs, and strengthen India’s manufacturing ecosystem under the ‘Make in India’ vision.

4. Infrastructure & Investment: Driving Economic Expansion

The government has allocated substantial funds to urban development, highways, and green energy projects.

₹1 lakh crore Urban Challenge Fund for developing smart cities and infrastructure projects.
Nuclear Energy Mission with ₹20,000 crore for research & development in small modular reactors.
Massive investment in railways, highways, and logistics hubs to improve connectivity.

These investments will boost economic growth, attract global investors, and create millions of jobs.

5. Education & AI Innovation: Building a Future-Ready Workforce

To strengthen digital education and AI-driven research, Budget 2025 has introduced key initiatives.

50,000 Atal Tinkering Labs to be set up in schools to foster innovation and STEM learning.
₹500 crore AI Centre of Excellence to promote AI research and skill development.
Increased focus on vocational training to bridge the skill gap in high-growth industries.

These steps will help prepare India’s youth for the future job market and position India as a global leader in AI and technology.

6. Social Welfare & Employment: Inclusive Growth for All

The budget introduces critical social welfare programs to empower workers and improve livelihoods.

Support for gig workers with e-Shram cards, healthcare benefits, and financial aid.
PM SVANidhi Scheme expansion with ₹30,000 credit limits for street vendors and small businesses.
Employment programs in rural and urban areas to create millions of new job opportunities.

These reforms will ensure financial security, skill development, and greater economic inclusion.

7. Financial & Business Reforms: Simplifying Regulations

To enhance ease of doing business, the budget introduces several reforms in FDI, taxation, and regulatory frameworks.

100% FDI in Insurance, up from 74%, to attract global investments.
Jan Vishwas Bill 2.0 decriminalizes 100+ business laws for a simplified regulatory environment.
Banking sector reforms to encourage digital transactions and financial inclusion.

These steps will strengthen investor confidence, drive economic growth, and position India as a global business hub.

8. Fiscal Management: Ensuring Economic Stability

The budget maintains fiscal discipline while supporting growth-oriented spending.

Fiscal Deficit Target set at 8% of GDP for FY-25, with a goal to reduce it to 4.4% in FY-26.
Customs Duty Exemptions on life-saving drugs to make healthcare more affordable.

With prudent fiscal management, the government aims to control inflation, reduce borrowing costs, and promote economic stability.

9. Customs & Duties: Boosting Trade & Manufacturing

The budget introduces revised customs duty policies to promote domestic manufacturing and exports.

Basic Customs Duty exemptions on electronic components to support local manufacturing.
Tariff reductions on raw materials to enhance production efficiency.

These measures will reduce import dependency, encourage local production, and make Indian industries globally competitive.

Conclusion: A Budget for Growth, Stability & Inclusion

The Union Budget 2025 lays the foundation for a stronger, self-reliant, and digitally empowered India. With tax reliefs, infrastructure expansion, AI-driven education, and social welfare programs, the budget balances economic growth with inclusive development.

For a detailed sector-wise analysis, Download our Special Report here and stay ahead of the latest economic trends!