Union Budget

2025-26

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 1

 Union Budget
2025-26

This PAID PDF is provided by AffairsCloud’s dedicated team that works

diligently to provide aspirants with high-quality content. We recommend
you to purchase this PDF subscription and seize the opportunity to learn
efficiently.
Help Us to Grow & Provide Quality Service

Click here to Download the CareersCloud APP

Click here to Join the Telegram Channel
Current Affairs Channel
AffairsCloud Hindu Vocabs

Suggestions & Feedback are welcomed

[email protected]
Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 2
 Union Budget
2025-26

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 3

 Union Budget
2025-26
!!! Quiz on Union Budget 2025-26 will soon be covered daily on our CareersCloud
App for your effective revision. Stay tuned!!!!

95th Union Budget 2025-26

What is the Budget?

i.It is an Annual Financial statement of the estimated receipts and expenditure of the Government in a
Financial Year (which begins on 1st April of the current year and ends on 31st March of the following
year). Every year, the Finance Minister of India presents the Union Budget.
ii.The Union Budget has two parts: The Annual Financial Statement and the Demand for Grants.
• The Annual Financial Statement provides a summary of the government's revenue for the
upcoming year.
• Demand for Grants includes an estimated expenditure from the Consolidated Fund that needs
to be submitted.
iii.Until 2018, as a part of tradition, finance ministers carried the budget in a leather briefcase ‘Bahi
Khata’ (a ledger wrapped in red cloth) and now it is replaced with Made in India tablet (paperless
budget) for the second consecutive year.
iv.Union Budget of India also referred to as the Annual Financial Statement in Article 112 of the
Constitution of India.It will be on the first day of February. Until 2016 it was presented on the last
working day of February by the finance minister in Parliament.

Union Budget 2025-26

• On February 1, 2025, the Budget session was held in Parliament under the chairmanship of Lok
Sabha Speaker Om Birla, in which the Union Finance Minister (FM) Nirmala Sitharaman
presented the 95th Union Budget of India for 2025-2026.
• This said to be India’s 5th paperless budget, it replaced the traditional ‘Bahi-Khata’ with a
Made-in-India tablet wrapped in a red-coloured cover with a national emblem emblazoned on
it.
• It was the 6th budget of the Narendra Modi-led National Democratic Alliance (NDA)
government’s second term (before the 2024 general elections). This was also the 6th Budget
presentation of Nirmala Sitharaman since 2019.

Finance Minister Speech

Finance Minister Nirmala Sitharaman delivered her budget speech for the 2025-26 Union Budget
lasting 77 (1 hour and 17 minutes). This is her 8th consecutive budget presentation, making her the
only finance minister to achieve this feat.
• Longest Full Budget(2020) - 162 Minutes (2 hours, 42 mins)
• Shortest Full Budget(2025) - 134 Minutes (1 hour, 14 mins)
• Shortest Interim (2024) - 57 Minutes

Theme of the Budget –

• The Finance Minister presented the Union Budget 2025-26 with the theme “Sabka Vikas”(
“Development for All”).

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 4

 Union Budget
2025-26
• In Budget 2025,Quoting Telugu poet and playwright Shri Gurajada Appa Rao’s famous lines, ‘A
country is not just its soil; a country is its people.’

Fiscal Position:
• The budget estimates total receipts (excluding borrowings) at Rs 34,96,409 crore, about 11.1%
higher than the revised estimate of 2024-25.
• Total expenditure is projected to be around Rs.50,65,345 crore 7.4% higher than the revised
estimate of 2024-25. The fiscal deficit is projected at 4.4% of Gross Domestic Product(GDP).

Viksit Bharat (Developed India)

The budget highlights the government's commitment to achieving a Viksit Bharat (Developed India)
by 2047. Viksit Bharat,encompasses:
• Zero poverty,
• 100% quality education,
• Affordable, comprehensive healthcare,
• Fully skilled workforce,
• 70% women in economic activities, and
• India is the global food basket.

Key Focus Areas

The proposed measures cover ten broad sectors emphasizing Garib, Youth, Annadata, and Nari:
1. Spurring Agricultural Growth
2. Strengthening Rural Prosperity
3. Inclusive Growth for All
4. Advancing Manufacturing & Make in India
5. Supporting MSMEs
6. Employment-driven Development
7. Investing in People & Innovation
8. Ensuring Energy Security
9. Export Promotion
10. Fostering Innovation
Development Areas
• Key Engines: Agriculture, MSMEs, Investments, Exports
• Fuel: Structural Reforms
• Guiding Principle: Inclusivity
• Destination: Viksit Bharat
• Transformative Reforms
The Budget introduces key reforms across six critical domains:
1. Taxation
2. Power Sector
3. Urban Development
4. Mining
5. Financial Sector
6. Regulatory Reforms

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 5

 Union Budget
2025-26
Highlights of India’s Fiscal Position
i. Fiscal Deficit (FD): The Budget Estimate (BE) for 2025-26 sets the Fiscal Deficit at 4.4% of Gross
Domestic Product (GDP), decreased from 4.8% in the Revised Estimate (RE) for 2024-25.
• The government is focused on reducing the fiscal deficit to below 4.5% by FY 2025-26.
• Definition: Fiscal Deficit represents the difference between the total expenditure and the sum
of Revenue Receipts and Non-Debt Capital Receipts (NDCR). It reflects the total borrowing
requirement of the Government.
• Primary deficit is fiscal deficit less interest payments. It is estimated to be 0.8% of GDP in
2025-26
ii. Nominal GDP: For BE 2025-26, the nominal GDP is projected at Rs 3,60,80,000 crore, assuming a
10.1% growth as per the First Advance Estimates of FY 2024-25.
iii. Capital Expenditure (CapEx): The CapEx outlay for 2025-26 is increased by 7.4% to Rs 12,34,567
crore, amounting to 3.1% of GDP.
• FY26 has set capital expenditure at Rs. 11,21,000 crore, reflecting a 10% increase over the
revised estimate of Rs. 10,18,000 crore for FY25.
iv. Monetary Policy: The Monetary Policy Committee (MPC) maintained the policy repo rate at 6.5%
in FY 2024-25.
v. Economic Growth: The Indian economy is estimated to grow by 6.4% in FY 2024-25. For FY 2025-
26, the Economic Survey projects a growth rate between 6.3% to 6.8%.
• Debt: The central government aims to reduce its outstanding liabilities to around 50% of GDP
by March 2031. In 2025- 26, outstanding liabilities are estimated to be 56.1% of the GDP.
vi.Taxation: The government has proposed modifications to the income tax slabs from the FY 2025-
26 under the new tax regime.
• The old tax regime remains unchanged. Introduction of new income tax slabs with increased
exemptions for individuals earning up to Rs.12 lakh.
vii.Tax and Non-Tax Revenue Estimates for 2025-26
• Indirect Tax: Total indirect tax collections for 2025-26 are estimated at Rs. 17,35,100 crore. Of
this, Rs. 10,10,890 crore (86%) is expected from Central Goods and Services Tax (CGST), and
Rs. 1,67,110 crore (14%) from the GST compensation cess.
• Corporation tax: The collection from taxes on companies is expected to grow by 10.4% in
2025-26.
• Taxes on income: Taxes on income are expected to grow by 14.4% in 2025-26.
• Non-tax receipts: In 2025-26, non-tax revenue is expected to grow 9.8% over the revised
estimates for 2024-25. Non-tax revenue is estimated to be 3% lower than budgeted in 2024-
25.
• Toll on the usage of roads and bridges is budgeted at Rs 36,000 crore for 2025-26,which is
44% higher than the revised estimate for 2024-25.

Budget 2024-25 (Rs crore)

Item RE 2024-25 (Rs BE 2025-26 (Rs % change (RE 2024-25
crore) crore) to BE 2025-26)
Total Receipts (other than 31,46,960 34,96,409 + 11.1%
borrowings)

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 6

 Union Budget
2025-26
Revenue Receipts 30,87,960 34,20,409 + 10.8%

Capital Receipts 59,000 76,000 + 28.8%

Total Receipts (including 47,16,487 50,65,345 +7.4%

borrowings)

Total Expenditure 47,16,487 50,65,345 +7.4%

Revenue Expenditure 36,98,058 39,44,255 +6.7%

Capital Expenditure 11,21,090 10,18,429 +10.1%

Fiscal Deficit (as % of GDP) 4.8% (15,69,527) 4.4% (15,68,936) 0.0%

Revenue Deficit (as % of 1.9% (6,10,098) 1.5% (5,23,846) -14.1%

GDP)

Primary Deficit (as % of 1.3% (4,31,587) 0.8% (2,92,598) -32.2%

GDP)

Key Points:
Total Expenditure: The government plans to spend Rs 50,65,345 crore in 2025-26, marking a 7.4%
increase over the revised estimate of 2024-25.
• Capital expenditure is set to rise by about 10.1% over the revised estimates of 2024-25.
• Revenue expenditure is set to increase by 6.7% over the revised estimates of 2024-25.
Total Receipts: Government receipts (excluding borrowings) are estimated at Rs 34,96,409 crore,
11.1% higher than the revised estimates of 2024-25.
• The gap between these receipts and the expenditure will be bridged by borrowings, budgeted
at Rs 15,68,936 crore, 2.8% higher than the revised estimate of 2024-25.
Transfer to States: The central government will transfer Rs 25,59,764 crore to states in 2025-26, an
increase of 12.5% over the revised estimate of 2024-25.
Deficits:
• Revenue deficit is targeted at 1.5% of GDP, lower than the 1.9% revised estimate for 2024-25.
• Fiscal deficit is targeted at 4.4% of GDP in 2025-26, down from the revised estimate of 4.8% in
2024-25.
GDP: The government has estimated a nominal GDP growth rate of 10.1% in 2025-26 (i.e., real growth
plus inflation).

Ministry Allocations for 2025-26

In 2025-26, the top 13 ministries in terms of allocations account for 53% of the estimated total
expenditure. The Ministry of Defence has the highest allocation in 2025-26, at Rs 6,81,210 crore,
accounting for 13.4% of the total budgeted expenditure.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 7

 Union Budget
2025-26
1. Ministry of Defence: Rs.6,81,210 crore (13.4% of total expenditure). Allocation increases by
Rs.40,150 crore (6.3%) compared to the revised estimate of 2024-25. Capital outlay for
defence services: Rs.1,80,000 crore (12.9% higher than 2024-25 revised estimate).
2. Road Transport and Highways: Rs.2,87,333 crore (5.7% of total expenditure).
3. Railways: Rs.2,55,445 crore (5.0%).
4. Consumer Affairs, Food and Public Distribution: Rs.2,15,767 crore (4.3%).
Ministry of Jal Shakti:Allocation increases by Rs.47,945 crore to Rs.99,503 crore.Revised estimate
for 2024-25: Rs.51,558 crore (underspending mainly due to Jal Jeevan Mission)
Ministry of Rural Development:
Allocation increases by Rs.14,527 crore (8.3%) to Rs.1,90,406 crore.Increase driven by PMAY-Rural
and National Rural Livelihoods Mission
Ministry of Communication:Allocation decreases by Rs.42,096 crore (28%) to Rs.1,08,105
crore.Decrease due to lower allocation for capital infusion in BSNL.
Ministry of Housing and Urban Affairs (HUA): The allocation for HUA has been increased by 18%,
amounting to Rs.96,777 crore for the fiscal year 2025-26, compared to the previous FY 24-25.
Ministry Revised 2024-25 Budgeted 2025- % Change (2024-25
(Rs. crore) 26 (Rs. crore) RE to 2025-26 BE)

Defence 6,41,060 6,81,210 6.3%

Road Transport and Highways 2,80,519 2,87,333 2.4%

Railways 2,55,348 2,55,445 0%

Home Affairs 2,20,371 2,33,211 5.8%
Consumer Affairs, Food and 2,12,820 2,15,767 1.4%
Public Distribution

Rural Development 1,75,878 1,90,406 8.3%

Chemicals and Fertilisers 1,86,653 1,61,965 -13.2%

Agriculture and Farmers' 1,41,352 1,37,757 -2.5%

Welfare
Education 1,14,054 1,28,650 12.8%
Communications 1,50,201 1,08,105 -28%
Health and Family Welfare 89,974 99,859 11%

Jal Shakti 51,558 99,503 93%

Housing and Urban Affairs 63,670 96,777 52%

Other Ministries 21,33,030 23,69,358 11.1%

Total Expenditure 47,16,487 50,65,345 7.4%

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 8

 Union Budget
2025-26
Budget Allocations on Schemes
Scheme Name Revised Budgeted % Change (2024-25 RE
2024-25 2025-26 to 2025-26 BE)

MGNREGS 86,000 86,000 0%

Jal Jeevan Mission/National Rural 22,694 67,000 195.2%
Drinking Water Mission

PM-KISAN 63,500 63,500 0%

Pradhan Mantri Awas Yojana - Rural 32,426 54,832 69.1%

Samagra Shiksha 37,010 41,250 11.5%

National Health Mission 36,000 37,227 3.4%

Pradhan Mantri Awas Yojana - Urban 15,170 23,294 53.6%

Modified Interest Subvention Scheme 22,600 22,600 0%

Saksham Anganwadi and POSHAN 2.0 20,071 21,960 9.4%

New Employment Generation Scheme 6,799 20,000 194.1%

PM Surya Ghar Muft Bijli Yojana 11,100 20,000 80.2%

National Livelihood Mission - Ajeevika 15,047 19,005 26.3%

Pradhan Mantri Gram Sadak Yojana 14,500 19,000 31%

MGNREGS: Allocation for MGNREGS in 2025-26 is Rs. 86,000 crore, same as the revised estimate for
2024-25.So the percentage of increase is 0%.
• MGNREGS stands for the Mahatma Gandhi National Rural Employment Guarantee
Scheme. Launched by the Government of India in 2005 to provide scheme guarantees 100
days of wage employment to rural households.
PM KISAN: The allocation for PM KISAN remains unchanged at Rs. 63,500 crore in 2025-26.
• PM KISAN stands for Pradhan Mantri Kisan Samman Nidhi. It was launched in 2019 to
provide financial support to farmers across India. It offers direct income support by providing
Rs. 6,000 annually, paid in three equal installments of Rs. 2,000 each.
Pradhan Mantri Awas Yojana (PMAY): The total allocation for both rural and urban components of
PMAY is Rs. 78,126 crore for 2025-26, marking a 64% increase from the revised estimate of 2024-25.
In contrast, the 2024-25 expenditure is expected to be 44% lower than the budget estimate.
Jal Jeevan Mission: For 2025-26, the allocation is Rs. 67,000 crore, whereas the revised estimate for
2024-25 stands at Rs. 22,694 crore, significantly lower than the budget estimate of Rs. 70,163 crore.
New Schemes: Rs. 41,700 crore has been allocated to the Department of Economic Affairs for new
schemes, compared to Rs. 62,593 crore in 2024-25.
• However, only Rs. 9,068 crore is estimated to be spent in 2024-25.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 9

 Union Budget
2025-26
Expenditure on Scheduled Caste(SC) and Scheduled Tribe(ST) sub-plans and schemes for the
welfare of women, children, and the North Eastern Region (NER):
• Programmes for the welfare of women and children have been allocated Rs 5,65,161 crore in
2025-26, an increase of 18.5% over the revised estimate of 2024- 25.
• The allocation for children's welfare will rise due to increased funding for school education
under Samagra Shiksha (SS) and PM-SHRI (Pradhan Mantri Schools for Rising India).
• The Scheduled Castes (SCs) allocation will also increase, driven by higher funding for the
National Rural Livelihoods Mission (NRLM).

Mutual Credit Guarantee Scheme for MSMEs:

Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) approved by the Government of India
(GoI).Provides 60% guarantee coverage by National Credit Guarantee Trustee Company Limited
(NCGTC).
• Available to Member Lending Institutions (MLIs) for loans up to Rs. 100 crore to eligible
MSMEs.
• Purpose: To facilitate credit for equipment/machinery purchase.
• Borrowers must have a valid Udyam Registration Number.
• The scheme is valid for 4 years from the date of operational guidelines or until Rs. 7 lakh crore
of cumulative guarantees are issued, whichever is earlier.
• MLIs - All Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs)
and All India Financial institutions (AIFIs), who register with NCGTC under the Scheme.

Khelo India program received an allocation of Rs.1,000 crore for 2025-26,increased from Rs 800
crore in 2024-25.The Ministry for Youth Affairs and Sports has been allocated Rs 3,794.30 crore.

Aid to the Maldives

• India has raised its aid to the Maldives by 50% compared to the previous FY 2024-25.
Allocation increased to approximately Rs.600 crore (USD 68.7 million) from the previous
Rs.400 crore.
• Allocation for Sri Lanka has increased to Rs.300 crores from Rs. 245 crores.
• Bhutan remains the largest recipient of India's foreign aid, with an allocation of Rs 2,150 crores
for 2025-26, up from Rs 2,068 crores.

Payment to UN: India has contributed USD 37.64 million to the United Nations (UN) Regular
Budget for 2025.India is among 35 member states that have fully and promptly paid their regular
budget assessments to the UN.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 10

 Union Budget
2025-26
PART A –
1st Engine: Agriculture
• The Budget introduced the Prime Minister Dhan-Dhaanya Krishi Yojana to enhance
productivity, crop diversification, post-harvest storage, irrigation, and credit access across 100
districts in partnership with states.
• A 'Rural Prosperity and Resilience' programme will be launched in partnership with states
to address underemployment in agriculture, benefiting women, young farmers, marginal
farmers, and landless families.
• Phase-1 will cover 100 agri-districts with the support of multilateral banks.
• A 6-year “Mission for Atma Nirbharta in Pulses” will be launched on Tur, Urad, and Masoor,
with National Agricultural Cooperative Marketing Federation of India(NAFED) and National
Cooperative Consumers Federation of India(NCCF) procuring them from farmers.
• The Budget also highlights a Comprehensive Programme for Vegetables & Fruits,
Launching of National Mission on High Yielding Seeds, and a Five Year Mission for Cotton
Productivity.
• Loan limits under Kisan Credit Cards increase from ₹3 lakh to ₹5 lakh under the modified
interest subvention scheme.
• Makhana Board in Bihar – A Makhana Board will be established in the state to improve
production,processing, value addition, and marketing of makhana.
• Fisheries - India ranks second-largest globally in fish production and aquaculture. Seafood
exports are valued at 60 thousand crore.
• The government will create a framework to sustainably harness fisheries in India’s
economic zone and high seas, focusing on the Andaman and Nicobar and
Lakshadweep islands.
• Urea Plant in Assam - A plant with annual capacity of 12.7 lakh metric tons will be set up at
Namrup, Assam.
• India Post: Driving Rural Growth -India Post, with 1.5 lakh rural post offices, IPPB, and 2.4
lakh Dak Sevaks, will be transformed to larger to boost rural economic growth.
• Boosting Cooperative Sector Finance– Plan to support to the National Cooperative
Development Corporation(NCDC) to strengthen cooperative sector lending.

2nd Engine: MSME

1.Classification Criteria for MSMEs
• MSMEs (Micro, Small & Medium Enterprises) include manufacturing and services, comprising
5.7 crore units.
• 1 crore registered MSMEs employ 7.5 crore people.Contribute 36% of India's manufacturing
and 45% of exports.
• Investment and turnover limits for MSMEs to be increased by 2.5 and 2 times, respectively.
Enterprise Current Revised Current Revised
Type Investment Investment Turnover Turnover
Criteria (Rs) Criteria (Rs) Criteria (Rs) Criteria (Rs)

Micro 1 crore 2.5 crore 5 crore 10 crore

Enterprises

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 11

 Union Budget
2025-26
Small 10 crore 25 crore 50 crore 100 crore
Enterprises
Medium 50 crore 125 crore 250 crore 500 crore
Enterprises

2.Credit Availability with Guarantee Cover-

• Micro & Small Enterprises: Credit guarantee cover increased from Rs.5 crore to Rs.10 crore,
expected to provide Rs.1.5 lakh crore in additional credit over the next 5 years..
• Startups: Credit guarantee cover raised from Rs.10 crore to Rs.20 crore, with a 1% guarantee
fee for loans in 27 sectors for Atmanirbhar Bharat.
• Exporter MSMEs: Credit guarantee cover for term loans up to Rs.20 crore for well-run
exporters.
3.Credit Cards for Micro Enterprises – Plan to introduce customized Credit Cards with Rs.5 lakh
limit for micro enterprises registered on Udyam portal.
4.The Fund of Funds for Startups has raised Rs.91,000 crore, including Rs.10,000 crore from the
government. A new Fund of Funds will be created with an additional Rs.10,000 crore contribution.
5.Empowering First-Time Entrepreneurs of Women, SC, and STs -A new scheme will be launched
for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs and provide term
loans up to 2 crores during the next 5 years.
6.Labour-Intensive Sectors – Measures to promote employment and entrepreneurship
opportunities in labour-intensive sectors.
7. Focus Product Scheme for Footwear & Leather Sectors - The scheme is expected to create 22
lakh jobs, generate Rs.4 lakh crore in turnover, and boost exports by over Rs.1.1 lakh crore.
8.National Action Plan for Toys will implement a scheme to make India a global hub for toys.
9. National Institute of Food Technology, Entrepreneurship, and Management will be set up in
Bihar to boost food processing in the Eastern region as part of 'Purvodaya,'
10.Manufacturing Mission - Furthering “Make in India”: A National Manufacturing Mission will be
launched, covering small, medium, and large industries, with support for policy, execution, and
governance.
11.Clean Tech Manufacturing - The mission will also promote clean tech manufacturing, focusing on
solar PV cells, EV batteries, wind turbines, high-voltage equipment, and grid-scale batteries to boost
domestic value addition.

3rd Engine: Investment

• Saksham Anganwadi and Poshan 2.0 programme provides nutrition to over 8 crore children,
1 crore pregnant women and mothers, and 20 lakh adolescent girls in aspirational districts and
the northeast.
• Fifty thousand Atal Tinkering Labs(ATL) will be set up in Government schools in the next 5
years.
• Broadband connectivity will be provided to all Government secondary schools and primary
health centres in rural areas under the Bharatnet project.
• Bharatiya Bhasha Pustak Scheme – It will be implemented to provide digital-form Indian
language books for school and higher education.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 12

 Union Budget
2025-26
• Five National Centres of Excellence for Skilling will be established, offering global expertise
to train youth for "Make for India, Make for the World" manufacturing.
• Expansion of Capacity in IITs - Additional infrastructure will be created in the 5 IITs started
after 2014 to facilitate education for 6,500 more students.
• Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay
of ` 500 crore.
• Medical education seats will grow by 130% in 10 years, aiming to add 75,000 seats in the
next 5 years.
• The government will set up Day Care Cancer Centres in all district hospitals within 3 years,
with 200 centres planned for 2025-26.
• The PM SVANidhi scheme has aided 68 lakh street vendors and will now offer higher loans,
UPI-linked credit cards with Rs.30,000 limit, and capacity support.
• The government will set up Day Care Cancer Centres in all district hospitals within 3 years,
with 200 centres planned for 2025-26.
• The government will give identity cards, register gig workers on e-Shram portal, and provide
healthcare under PM Jan Arogya Yojana, benefiting 1 crore workers.

B. Investing in the Economy

PPP (Public-Private Partnership) in Infrastructure: Ministries will draft 3-year PPP project
pipelines; states can use IIPDF (India Infrastructure Project Development Fund) for proposals.
State Infra Support: INR 1.5 lakh crore as 50-year interest-free loans for capital expenditure and
reforms.
Asset Monetization Plan 2025-30: The second phase aims to invest Rs. 10 lakh crore in new projects
with regulatory and fiscal support.
Jal Jeevan Mission: Extended to 2028 for 100% tap water coverage, benefiting 15 crore rural
households since 2019.
• Focus on quality infrastructure, operation & maintenance (O&M) of rural water supply
schemes via community participation; MoUs with states/UTs for sustainability.
Urban Sector Reforms- Incentives for better governance, municipal services, and urban planning
reforms.
Urban Challenge Fund (UCF): Rs.1 lakh crore fund to implement for city growth, creative
redevelopment, and sanitation projects, financing up to 25% of costs; Rs.10,000 crore allocated for FY
2025-26.
Nuclear Energy Mission for Viksit Bharat:
• Aim to develop 100 GW of nuclear energy by 2047 for energy transition.
• Amendments to Atomic Energy Act and Civil Liability for Nuclear Damage Act to encourage
private sector participation. As of January 30, 2025, India’s nuclear capacity is 8180 MW.
• A Rs.20,000 crore mission for research and development of Small Modular Reactors (SMRs),
with 5 indigenously developed SMRs operational by 2033.
• The government plans to collaborate with the private sector for the following objectives:
• Setting up Bharat Small Reactors (BSRs).
• Research & Development (R&D) of Bharat Small Modular Reactors (SMRs).
• R&D of new technologies for nuclear energy.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 13

 Union Budget
2025-26
• This initiative aligns with India's pledge to generate 500 GW (Gigawatt) of non-fossil
fuel-based energy by 2030 and to meet 50% of energy needs through renewable energy
by 2030.
• New Uranium Deposit Discovery: A significant new uranium deposit was discovered
in and around the existing mine lease area of Jaduguda Mines which is located in
Jharkhand, India(India's oldest uranium mine).
Shipbuilding: Revamping the Shipbuilding Financial Assistance Policy to reduce cost disadvantages,
including Credit Notes for shipbreaking.
Large ships will be added to the Infrastructure Harmonized Master List (HML).
Maritime Development Fund: A Rs.25,000 crore fund will be set up for long-term support,with up to
49% government contribution and The remaining funds will be mobilized from ports and the private
sector.
UDAN - Regional Connectivity Scheme: The modified UDAN scheme will connect 120 new
destinations and carry 4 crore passengers in 10 years. The scheme has connected 88 airports and
operationalized 619 routes.
Greenfield Airport in Bihar: New Greenfield airports will be developed in Bihar, along with
expanding Patna and building a brownfield airport at Bihta,Bihar.
Western Koshi Canal Project: Financial aid will be provided for the Western Koshi Canal project,
benefiting farmers in Mithilanchal, Bihar, covering 50,000+ hectares.
Mining Sector Reforms: Reforms for mining will be promoted through best practices and a State
Mining Index.A policy for recovering critical minerals from tailings will be introduced.
SWAMIH Fund 2 (Special Window for Affordable and Mid-Income Housing Fund 2)
• 50,000 housing units completed under SWAMIH, aiding middle-class families.
• SWAMIH Fund 2, with ₹15,000 crore, aims to complete 1 lakh more units, supported by the
Government, banks, and private investors.
PM Gati Shakti Data for Private Sector (Pradhan Mantri Gati Shakti): The private sector will gain
access to data and maps from the PM Gati Shakti portal to enhance public-private partnerships (PPP)
and project planning.
Tourism for Employment-Led Growth: The top 50 tourist destinations will be developed in
partnership with states. Hotels in these areas will be included in the Infrastructure Harmonized
Master List (HML).
Measures for Employment-Led Growth
• Intensive skill-development programs for youth, including in Institutes of Hospitality
Management (IHM).
• MUDRA (Micro Units Development and Refinance Agency) loans for homestays.
• Performance-linked incentives (PLI) for states in destination management, including
amenities, cleanliness, and marketing.
• Introducing e-visa facilities and visa-fee waivers for select tourist groups.
Focus on Spiritual Destinations- Special focus on destinations related to the life and times of Lord
Buddha, building on the emphasis from the July Budget.
Medical Tourism & Heal in India - Medical tourism will be promoted in partnership with the private
sector, with a focus on capacity building and easier visa norms.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 14

 Union Budget
2025-26
Investing in Innovation
• Allocation of Rs.20,000 crore for private sector-driven Research, Development & Innovation
(RDI) initiatives.
• A fund will be explored to support next-generation startups in deep tech.
• PM Research Fellowship: 10,000 fellowships will be provided over the next five years for
technological research in IITs and IISc with increased financial support.
• The 2nd Gene Bank for Crops Germplasm will be set up with 10 lakh germplasm lines to
ensure future food ,nutritional security, genetic conservation.
National Geospatial Mission
• A National Geospatial Mission will be launched to develop foundational geospatial
infrastructure and data.
• It will use PM Gati Shakti to modernize land records, urban planning, and infrastructure project
design.
Gyan Bharatam Mission- The mission will document and conserve 1 crore manuscripts,
collaborating with institutions and collectors, and create a National Digital Repository for Indian
knowledge.

4th Engine:Exports
Export Promotion Mission - A mission to enhance export credit, support MSMEs, and tackle non-
tariff barriers.
BharatTradeNet (BTN) will be established as a digital platform for international trade
documentation and financing.
Global Supply Chain Integration- Support for domestic manufacturing to integrate with global
supply chains, focusing on Industry 4.0 and youth talent.
National Framework for GCC - A framework to boost Global Capability Centres(GCC) in tier 2 cities,
focusing on talent and infrastructure.
Warehousing for Air Cargo-Improving air cargo infrastructure and streamlining screening and
customs.
Tax Reforms- The government reaffirms commitment to tax reforms like faceless assessment, faster
returns, and self-assessment. A new income tax bill will be introduced next week.

Financial Sector Reforms and Development

• FDI : The Foreign Direct Investment(FDI) limit for the insurance sector will be raised from 74
to 100 percent.
• The services of India Post Payment Bank will be expanded in rural areas.
• National Bank for Financing Infrastructure and Development(NaBFID) will set up a ‘Partial
Credit Enhancement Facility’ for corporate bonds for infrastructure.
• Grameen Credit Score’ framework will be set up by Public Sector Banks to serve the credit
needs of Self-Help Group(SHG) members and people in rural areas.
• A forum for regulatory coordination and development of pension products will be set up.
• Requirements and procedures for speedy approval of company mergers will be rationalized.
• The Bilateral Investment Treaties (BIT) will be revamped to boost foreign investment and
promote ‘First Develop India.’

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 15

 Union Budget
2025-26
• A High-Level Committee for Regulatory Reforms will be set up for a review of all non-
financial sector regulations, certifications, licenses, and permissions.
• The 2025 Investment Friendliness Index will promote competitive cooperative federalism
among states.
• A mechanism under the Financial Stability and Development Council(FSDC) will be set up
to evaluate the impact of the current financial regulations and subsidiary instructions.
• The upcoming Jan Vishwas Bill 2.0 aims to decriminalize 100+ provisions across various laws.
The Jan Vishwas Act 2023 decriminalized over 180 legal provisions.

Indirect Taxes
Rationalisation of Customs Tariff Structure for Industrial Goods:
• Remove seven additional tariff rates, reducing to only eight rates, including ‘zero’.
• Apply appropriate cess to maintain duty incidence, with minor reductions on select items.
• Levy a maximum of one cess/surcharge, exempting the Social Welfare Surcharge on 82 tariff
lines subject to cess.
Relief on import of Drugs/Medicines
• Add 36 lifesaving drugs to the list fully exempt from Basic Customs Duty (BCD) and 6 others
with a 5% concessional duty.
• Extend full exemption and concessional duty to bulk drugs for manufacturing these medicines.
• Include 37 additional medicines and 13 new patient assistance programs under the BCD
exemption for free supply to patients.
Support to Domestic Manufacturing and Value addition
• Critical Minerals : July 2024 Budget fully exempted Basic Customs Duty (BCD) on 25 critical
minerals and reduced it for 2 others to support processing by Micro, Small, and Medium
Enterprises (MSMEs).
• The proposal includes fully exempting cobalt powder, lithium-ion battery scrap, lead,
zinc, and 12 other critical minerals.
• Textiles:Two more shuttle-less looms fully exempted from BCD. Knitted fabrics under nine
tariff lines will now attract "20% or ₹115/kg, whichever is higher."
• Electronic Goods: BCD on Interactive Flat Panel Displays (IFPD) raised to 20% from 10%.
Open Cell components' BCD reduced to 2.5% from 5%. Parts of Open Cells for LCD/LED TVs
fully exempted.
• Lithium-Ion Battery: 35 capital goods for EV (Electric Vehicle) battery manufacturing and 28
for mobile phone batteries added to the exemption list to boost domestic lithium-ion battery
production.
• Shipping Sector: BCD exemption on raw materials, components, and consumables for
shipbuilding extended for 10 years. Similar exemption granted for ship breaking to enhance
competitiveness.
• Telecommunication: BCD on Carrier Grade Ethernet switches reduced from 20% to 10%,
aligning with Non-Carrier Grade switches.
Export Promotion:
• Handicrafts: Export period extended from 6 months to 1 year, with a possible 3-month
extension. Nine new items added to duty-free inputs.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 16

 Union Budget
2025-26
• Leather: Full BCD exemption on Wet Blue leather to boost imports for value addition. Crust
leather export duty reduced from 20% to nil for small tanners.
• Marine Products: BCD on Frozen Fish Paste (Surimi) lowered to 5% from 30% , and on fish
hydrolysate to 5% from 15% .
• Domestic MROs (Maintenance, Repair, Overhaul):Export period for foreign-origin railway
goods imported for repairs extended from 6 months to 1 year, with a further 1-year extension.
Trade facilitation
• Time limit for Provisional Assessment: Presently, the Customs Act, 1962 does not provide
any time limit to finalize Provisional Assessments. A two-year limit, extendable by one year,
will now be introduced.
• Voluntary Compliance:A new provision will allow importers/exporters to voluntarily declare
material facts and pay duty with interest, without penalty, after goods clearance.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 17

 Union Budget
2025-26
PART - B
Direct Taxes
Reforms as a Means for Good Governance: Reforms are a tool for good governance. The Tamizh
Thirukkural Verse 542 highlights the people's expectation of responsive governance.
“vaanokki vaalum ulakellaam mannavan
koalnokki vaalung kuti”
Meaning: Just as living beings live expecting rains, Citizens live expecting good governance.
The objectives of tax proposals are as follows:
(i) Personal Income Tax reforms with special focus on middle class
(ii) Rationalization of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS) for easing
difficulties
(iii) Encouraging voluntary compliance
(iv) Reducing compliance burden
(v) Ease of doing business
(vi) Employment and investment
Income Tax Reforms for Individuals:
• The 'Nil tax' slab was raised to Rs.2.5 lakh in 2014, Rs.5 lakh in 2019, and Rs.7 lakh in 2023.
• Now, no income tax will be charged on earnings up to Rs.12 lakh per year under the new
regime (Rs.12.75 lakh for salaried individuals with the standard deduction of Rs.75,000).

The New Revised Tax Slab

Income Range (Rs.) Tax Rate (%)
0 - 4,00,000 Nil

4,00,001 - 8,00,000 5%

8,00,001 - 12,00,000 10%

12,00,001 - 16,00,000 15%

16,00,001 - 20,00,000 20%

20,00,001 - 24,00,000 25%

Above 24,00,000 30%

For taxpayers with income up to Rs.12 lakh (excluding special rate income like capital gains), a tax
rebate will ensure no tax is payable. This is in addition to benefits from reduced slab rates.
• Examples of Tax Benefits:
• Income of Rs.12 lakh: Tax benefit of Rs.80,000 (100% of tax payable under old rates).
• Income of Rs.18 lakh: Tax benefit of Rs.70,000 (30% of tax payable under old rates).
• Income of Rs.25 lakh: Tax benefit of Rs.1,10,000 (25% of tax payable under old rates).

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 18

 Union Budget
2025-26
• As a result of these proposals, revenue of about Rs. 1 lakh crore in direct taxes and Rs. 2600
crore in indirect taxes will be forgone.
• "Foregone" means that the government will not collect or receive the revenue that would
have been generated, as a result of implementing certain tax exemptions, reductions, or
changes. It refers to the revenue that the government is expected to lose due to the proposed
tax changes.

Rationalization of TDS/TCS for easing difficulties

• Interest exemption for senior citizens doubled from Rs.50,000 to Rs.1 lakh.
• TDS on rent limit increased from Rs.2.4 lakh to Rs.6 lakh, reducing small transactions
• under TDS.
• TCS threshold on remittances under RBI's Liberalized Remittance Scheme (LRS) raised from
Rs.7 lakh to Rs.10 lakh.
• No TCS on educational remittances funded by loans from specified institutions.
• TCS on the sale of goods removed; higher TDS applies.

Encouraging Voluntary Compliance

Updated Returns Timeline Extended: Following the success of the updated return facility launched
in 2022, where 90 lakh taxpayers voluntarily corrected income omissions, the time limit to file
updated returns is now extended from 2 to 4 years.

Reducing Compliance Burden

The period of registration for small charitable trusts/institutions increased to 10 years from 5 years
to reduce the compliance burden.

Ease of Doing Business

• A scheme will be introduced to determine the Arm's Length Price (ALP) for international
transactions over a three-year block period.
• Withdrawals from old National Savings Scheme (NSS) accounts made on or after August 29,
2024, will be tax-exempt.
• National Pension System (NPS) Vatsalya accounts will receive similar benefits as regular
NPS accounts, subject to overall limits.
• The Vivad Se Vishwas (VSV) Scheme, launched in July 2024, resolved income tax disputes,
benefitting 33,000 taxpayers.

Employment and Investment

• Electronics Manufacturing: A presumptive taxation regime will be introduced for non-
residents providing services to resident companies establishing electronics facilities. Safe
harbour rules will apply to non-residents storing components for specified manufacturing
units.
• Tonnage Tax: Inland vessels registered under the Indian Vessels Act, 2021, will now be
eligible for the existing tonnage tax scheme, extending benefits beyond sea-going ships.
• What is Tonnage Tax:It is a special tax regime where shipping companies pay tax based on the
tonnage (carrying capacity) of their vessels rather than actual profits.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 19

 Union Budget
2025-26
• Start-Up Support: Incorporation period for start-ups to avail benefits extended by five years,
covering those set up before April 1, 2030.
• IFSC Promotion: Tax benefits extended to ship-leasing units, insurance offices, and treasury
centres in the International Financial Services Centre (IFSC), with the cut-off for operations
extended to March 31, 2030.
• Alternate Investment Funds (AIFs): The government plans to provide tax certainty for
Category I and II AIFs, which invest in infrastructure and related sectors, on gains from
securities.
• Sovereign and Pension Funds Investment Extension: To boost infrastructure funding, the
investment deadline for Sovereign Wealth Funds and Pension Funds has been extended by
five years, until March 31, 2030.

Facts About Union Budget:

• Under Article 112 of the Constitution of India, the Union Budget is an Annual financial
statement that encompasses the receipt and expenditure of the Indian government, the
information on the Consolidated Fund of India, Contingency Fund of India and Public
Accounts.
• Every year it is presented on the last working day of February by the Finance Minister of India
in Parliament.
• But in 2017 Arun Jaitley (FM IN 2014) started presenting the Union Budget on February 1
departing from the colonial-era tradition of using the last working day of February.
• The budget is presented by means of the financial bill and Appropriation bill which has to be
passed by the houses.
• The budget division of the department of economic affairs (DEA) in the finance ministry is the
nodal body responsible for producing the budget.
Note- Article267 of the Constitution authorizes the existence of a Contingency Fund of India
ii.The list of Budget documents presented to the
Parliament:
A. Annual Financial Statement (AFS)
B. Demands for Grants (DG)
C. Finance Bill
D. Fiscal
Policy Statements mandated under Fiscal Responsibility and Budget
Management Act(FRBM Act), Act:
i. Macro-Economic Framework Statement
ii. Medium-Term Fiscal Policy cum Fiscal Policy
Strategy Statement
E. Expenditure Budget
F. Receipt Budget
G. Expenditure Profile
H. Budget at a Glance
I. Memorandum Explaining the Provisions in the
Finance Bill
J. Output Outcome Monitoring Framework

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 20

 Union Budget
2025-26
K. Key Features of Budget 2024-25
L. Implementation of Budget Announcements, 2023-2024
The documents shown at Serial Nos. A, B, and C are mandated by Article 112,113 and 110 (a) of the
Constitution of India respectively, while the documents at Serial No. D (i) and (ii) are presented as per
the provisions of the Fiscal Responsibility and Budget Management Act, 2003.
iii.History of Budget:
• The Budget was first introduced in India on April 7, 1860, when Scottish economist and
politician James Wilson from the East India Company presented it to the British Crown.
• First Union budget of independent India was presented by India’s first finance minister R. K.
Shanmukham Chetty in 1947.
• First Indian governor of RBI who presented theInterim Budget In 1951-52 was C D Deshmukh
• First PM who presented the Union Budget Pandit was Jawaharlal Nehru in 1958-59.
• Black Budget – Union Budget 1973-74 is known as Black Budget of India as the budget deficit
rose to Rs 550 crore.
• Until 2016, every year it is presented on the last working day of February by the Finance
Minister of India in Parliament.
• But after 2016 the government presents it on the first day of February.
• In 1959, Morarji Desai, the finance minister of India, presented the maximum number of
budgets so far i.e. 10.
• In 2017, the Rail Budget was merged with the Union Budget.
• Nirmala Sitharaman in her first budget in 2019 replaced the leather briefcase carrying budget
documents with a traditional red cloth ‘bahi-khata’.
• Union Budget of 2021-22 was delivered in paperless form for the first time. A ‘Union Budget
Mobile App’ was also launched for hassle-free access of Budget documents by Members of
Parliament (MPs) and the general public.
• Every year, the government follows the annual tradition of organising a Halwa ceremony,
days before the Budget is presented in the Parliament. There is an occasion observed by the
Ministry of Finance, called Halwa ceremony, which marks the commencement of the Budget
printing process.

Key Terminologies:
i.Fiscal Deficit (FD): It is the adverse fiscal balance which is a difference between the Revenue
Receipts Plus Non-Debt Capital Receipts (NDCR) i.e., total of the non-debt receipts and the total
expenditure.
• FD is reflective of the total borrowing requirement of govt.
ii.Revenue Deficit (RD): It refers to the excess of revenue expenditure over revenue receipts.
iii.Effective Revenue Deficit (ERD): It is the difference between Revenue Deficit and
Grant-in-Aid for Creation of Capital Assets.
iv.Primary Deficit: It is measured as Fiscal Deficit less interest payments. Effective Capital
Expenditure (Eff-Capex) refers to the sum of Capital Expenditure and Grants-in-Aid for the Creation of
Capital Assets.

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 21

 Union Budget
2025-26
Aspirant Queries

Aspirant: Does Affairscloud covers all the Current affairs topics related
to examinations?
Affairscloud: We Guaranteed All the Important topics related to
examination are covered in Our Daily CA content and Daily CA Quizzes.
Aspirant: Why is there a delay in news?
Affairscloud: As some of the major news sites doesn't provide the required
data on the exact day, we take extra time for important data to be presented
to the aspirants on the examination basis to ensure nothing is missed.
Example: In 'Important Days' topics the International Organisations
publish their reports and Rankings in the evenings, to make sure every data
is covered, we delay the topics to the next day
Candidates appearing for Competitive Exams. Kindly Share the General
Awareness questions, which asked in their respective exams to
“[email protected]”

GA Questions Asked in Exams

• Affairscloud’s Self Analysis for General Awareness Section

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 22

 Union Budget
2025-26
Most Trusted Source!!!!! Since 2014, nearly 85% of the questions in the General
Awareness section on Bank Exams have been covered by Affairscloud@Careerscloud.

Detailed Analysis of GA Questions asked in IBPS Clerk Mains Exam 2024:

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 23

 Union Budget
2025-26

Report Errors in the PDF - [email protected] Copyright 2014-2025 @ AffairsCloud.com 24