Union Budget 2025-26: Focus on Growth, Fiscal Discipline, and Social Welfare; Here's a detailed analysis

The Union Budget 2025-26 outlines a comprehensive roadmap for India’s economic growth, emphasizing infrastructure expansion, fiscal prudence, and inclusive development. With a total expenditure of ₹50.65 lakh crore, the budget prioritizes capital investment, social sector spending, and tax reforms while aiming to reduce the fiscal deficit to 4.4% of GDP. Key allocations include significant funding for railways, highways, defence, and rural development, reinforcing the government’s commitment to long-term economic stability and job creation.

Key focus of the 2025-2026 Budget includes:

Agriculture & Rural Prosperity

Programs like the National Mission on High Yielding Seeds and Makhana Board aim to improve agricultural productivity.
Enhanced credit for farmers, with short-term loans through Kisan Credit Cards (KCC) and the launch of missions to promote pulses production and sustainable cotton farming.

Support for MSMEs

Revision of MSME classification to encourage growth with revised investment and turnover limits.
Credit guarantees and customized credit cards for micro-enterprises, supporting up to 10 lakh micro-businesses.
Focus on labor-intensive sectors, including footwear, leather, toy, and food processing industries to create jobs.

Infrastructure & Urban Development

The Urban Challenge Fund allocates ₹1 lakh crore for redeveloping cities and water management.
Support for states through a ₹1.5 lakh crore outlay for capital expenditure, including interest-free loans.

Technological & Educational Advancements

Expansion of medical education, artificial intelligence initiatives, and Atal Tinkering Labs.
Broadband connectivity in rural schools, Centers of Excellence for skilling, and development of IITs.

Tax Reforms

Proposals for rationalizing tax structures and extending the deadline for filing updated returns.
Income tax reform focused on the middle class, with deductions for senior citizens and adjustments in TDS limits for rent payments.

Financial Sector Reforms

Increased foreign direct investment limits for the insurance sector and revamped credit score frameworks for rural areas.
Introduction of the Grameen Credit Score to serve rural credit needs, and revamped KYC registry for speedier approvals.

Rupee Comes From (Budget 2025-26)

The government’s total revenue comes from various sources, categorized as follows:

Corporation Tax – 17%
Income Tax (includes Securities Transaction Tax) – 22%
Customs Duty – 4%
Union Excise Duties – 5%
Goods & Services Tax (GST) & Other Taxes – 18%
Non-Tax Receipts – 9%
Non-Debt Capital Receipts – 1%
Borrowings & Other Liabilities – 24%

Rupee Goes To (Budget 2025-26)

The government’s expenditure is divided into multiple categories:

Central Sector Schemes (excluding Defence & Major Subsidies) – 16%
Interest Payments – 20%
Defence – 8%
Major Subsidies (Food, Fertilizer, Petroleum, etc.) – 6%
Finance Commission & Other Transfers – 8%
State Share of Taxes & Duties – 22%
Pensions – 4%
Other Expenditure – 8%
Centrally Sponsored Schemes – 8%

Total Revenue and Expenditure

Revenue Estimates

Total Revenue Receipts: ₹34,20,409 crore
Tax Revenue (Net to Centre): ₹28,37,409 crore
Non-Tax Revenue: ₹583,000 crore
Capital Receipts (including borrowings): ₹16,44,936 crore

Expenditure Estimates

Total Expenditure: ₹50,65,345 crore
Revenue Expenditure: ₹39,44,255 crore
Capital Expenditure: ₹11,21,090 crore
Effective Capital Expenditure: ₹15,48,282 crore

Deficit Indicators

Key Deficit Figures

Fiscal Deficit: ₹1,56,89,36 crore (4.4% of GDP)
Revenue Deficit: ₹5,23,846 crore (1.5% of GDP)
Effective Revenue Deficit: ₹96,654 crore (0.3% of GDP)
Primary Deficit: ₹2,92,598 crore (0.8% of GDP)

Deficit Financing

Market Borrowings: ₹11,53,834 crore
Securities against Small Savings: ₹343,382 crore
External Debt: ₹23,490 crore

Sector-Wise Allocation

Major Expenditures

Interest Payments: ₹12,76,338 crore
Defence: ₹4,91,732 crore
Pension: ₹2,76,618 crore

Subsidies:

Food: ₹203,420 crore
Fertilizer: ₹167,887 crore
Petroleum: ₹12,100 crore

Key Infrastructure and Development Allocations

Rural Development: ₹2,66,817 crore
Education: ₹1,28,650 crore
Healthcare: ₹98,311 crore
Urban Development: ₹96,777 crore
Transport Infrastructure: ₹5,48,649 crore

Transfer to States & UTs

Total Transfer to States & UTs: ₹25,01,284 crore

State Devolution: ₹14,22,444 crore
Finance Commission Grants: ₹1,32,767 crore
Centrally Sponsored Schemes: ₹541,850 crore
Other Grants & Loans: ₹3,74,725 crore

Key Government Schemes and Allocations

Agriculture & Rural Development

PM-KISAN: ₹63,500 crore
Mahatma Gandhi NREGA: ₹86,000 crore
PM Awas Yojana (Grameen & Urban): ₵74,626 crore

Education & Employment

PM Schools for Rising India (PM SHRI): ₹7,500 crore
Samagra Shiksha: ₹41,250 crore
Skill Development & Apprenticeships: ₹13,560 crore

Health & Social Welfare

Ayushman Bharat – PMJAY: ₹9,406 crore
POSHAN 2.0 (Nutrition Mission): ₹21,960 crore
Social Assistance Programs: ₹9,652 crore

Infrastructure & Industrial Development

Jal Jeevan Mission: ₹67,000 crore
PM Gram Sadak Yojana: ₹19,000 crore
Production Linked Incentive (PLI) Schemes: ₹2,445 crore

Budget Allocations for All Ministries (2025-26):

Top Ministries by Budget Allocation

Ministry of Finance – ₹19,39,001.26 crore
Ministry of Defence – ₹6,81,210.27 crore
Ministry of Consumer Affairs, Food & Public Distribution – ₹2,15,767.09 crore
Ministry of Railways – ₹2,55,445.18 crore
Ministry of Road Transport & Highways – ₹2,87,333.16 crore

Key Ministry Allocations

Infrastructure & Development

Ministry of Housing & Urban Affairs – ₹96,777.00 crore
Ministry of Power – ₹21,847.00 crore
Ministry of Ports, Shipping & Waterways – ₹3,470.58 crore

Social Sectors

Ministry of Education – ₹1,28,650.05 crore
Ministry of Health & Family Welfare – ₹99,858.56 crore
Ministry of Women & Child Development – ₹26,889.69 crore
Ministry of Rural Development – ₹1,90,405.53 crore

Scientific Research & Technology

Department of Space – ₹13,416.20 crore
Ministry of Science & Technology – ₹38,613.32 crore
Ministry of Electronics & IT – ₹26,026.25 crore

Agriculture & Industry

Ministry of Agriculture & Farmers Welfare – ₹1,37,756.55 crore
Ministry of Commerce & Industry – ₹18,446.05 crore
Ministry of Chemicals & Fertilizers – ₹1,61,965.21 crore

Law & Governance

Ministry of Home Affairs – ₹2,33,210.68 crore
Ministry of Law & Justice – ₹5,850.37 crore
Ministry of External Affairs – ₹20,516.61 crore