The Union Budget for the fiscal year 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, outlines the Indian government's financial plan to boost economic growth, support various sectors, and improve the well-being of its citizens. This budget focuses on tax reforms, infrastructure development, employment generation, and support for agriculture and innovation.

Taxation reforms

One of the biggest changes in this year’s budget is about income tax. People who earn up to ₹12 lakh every year will no longer have to pay any income tax. This will help them have more money to spend, save, and invest, which can help the economy grow.

The government has also made the tax system simpler by changing the tax rates and slabs. For example, people who earn ₹24 lakh or more per year will pay the highest tax rate of 30%. These changes make the tax system easier to understand and will reduce the amount of tax people have to pay.

For senior citizens, the government has raised the limit for tax deductions on interest from ₹50,000 to ₹1 lakh. Also, the limit for tax deductions on rent has gone up from ₹2.4 lakh to ₹6 lakh. These changes aim to make paying taxes easier for everyone.

Infrastructure development

The budget focuses a lot on building and improving infrastructure in India. The government plans to spend a lot of money on projects like roads, railways, and airports. This will help create jobs, improve transportation, and make trade within the country better.

One important plan is to develop the top 50 tourist destinations in India, with help from state governments. This will improve tourism facilities, bring more visitors to these places, and create more jobs in the tourism industry.

Employment generation

Creating jobs is a key focus of the budget. The government has introduced several measures to boost employment across various sectors. For instance, there is a plan to formalize gig economy workers, such as those working for ride-sharing services or food delivery platforms. This initiative will help these workers access healthcare and welfare programs, improving their job security and quality of life.

The budget also includes support for startups and small businesses, which are significant sources of employment. By providing incentives and funding opportunities, the government aims to encourage entrepreneurship and the creation of new jobs.

Support for agriculture

Agriculture is very important for India's economy, and the budget includes several plans to help farmers and improve farming. One new program called the Prime Minister Dhan-Dhaanya Krishi Yojana is designed to help farmers earn more money and use better farming methods.

The government will give short-term loans of up to ₹5 lakh to around 7.7 crore farmers, fishermen, and dairy farmers through the Kisan Credit Card (KCC) scheme. This money will help them pay for their needs and invest in ways to improve their farming.

To reduce the need to import pulses like tur, urad, and masoor, the government is starting a six-year mission to grow more of these crops in India. This will help farmers earn better prices and make sure there is enough of these crops in the country.

Promotion of Innovation and research

The budget recognises the importance of innovation and research in driving economic growth. An allocation of ₹20,000 crore has been made to implement a private sector-driven research, development, and innovation initiative. This funding is expected to encourage businesses to invest in new technologies and solutions.

The Prime Minister Research Fellowship program will provide ten thousand fellowships for technological research in prestigious institutions like the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc). This initiative aims to nurture talent and promote advanced research in the country.

Fiscal management

The budget estimates total receipts (excluding borrowings) at ₹34.96 lakh crore and total expenditure at ₹50.65 lakh crore. The net tax receipts are projected to be ₹28.37 lakh crore. The fiscal deficit, which is the gap between the government's income and expenditure, is estimated to be 4.4% of the Gross Domestic Product (GDP). This indicates the government's commitment to maintaining fiscal discipline while supporting economic growth.

Bihar’s budget highlights in the Union Budget 2025-26

With the Bihar Assembly elections scheduled for later this year, the Union Budget 2025-26 has announced several key projects to support the state's development, especially in agriculture, infrastructure, education, and tourism.

Makhana board and food processing institute

To help farmers in Bihar, the government will set up a Makhana Board. This board will train farmers in growing and processing makhana (fox nuts), a major crop in the state. It will also connect them with government schemes to provide financial and technical support.

Additionally, a food processing institute will be established to promote agro-based industries. This will help farmers get better prices for their produce and improve food production in Bihar.

Education and IIT Patna expansion

The budget includes plans to expand the Indian Institute of Technology (IIT) Patna, making space for more students. This is part of a national initiative to increase capacity in five IITs, adding infrastructure to accommodate 6,500 more students.

Airports and transportation

The budget focuses on improving Bihar’s air connectivity with:

  • A new greenfield airport in the state.
  • Expansion of Patna Airport to handle more flights and passengers.
  • Development of Bihta Airport as a brownfield project.
  • Requests for new airports in Rajgir, Bhagalpur, and Raxaul are under review.

Irrigation and water management

The Western Kosi Canal Project will receive significant financial aid to improve irrigation in Madhubani and Darbhanga districts. This project, which began decades ago, aims to provide water to 50,000 hectares of farmland, improving agricultural productivity.

Tourism and cultural development

The budget also focuses on promoting Bihar’s tourism industry. The government will invest in Gaya, an important religious site for Buddhists, to attract more visitors. This is part of a national effort to boost tourism in areas with spiritual significance.

Bihar’s demands from the central government

Before the budget, Bihar’s Deputy Chief Minister requested ₹13,000 crore in aid for:

  • Flood management in North Bihar.
  • Upgrading Darbhanga Airport.
  • Constructing 10 new Kendriya Vidyalayas (central government schools).
  • Relaxing borrowing limits to allow Bihar to take on more development projects.
  • Approval for a small modular nuclear reactor for energy generation.
  • High-speed road corridors to improve connectivity.