Union Finance Minister Nirmala Sitharaman on Saturday presented the Budget for the financial year 2025-’26.

This was the first full budget of the third term of the National Democratic Alliance government. It was tabled a day after the Economic Survey 2024-’25 said India will need to achieve sustained economic growth of close to 8% for at least a decade to achieve its goal of becoming a developed country by 2047.

Here are the key announcements from Sitharaman’s Budget:

Income Tax

The Centre proposed that there would be no income tax payable for income up to Rs 12 lakh under the new regime. The limit would be Rs 12.75 lakh for salaried taxpayers considering the standard deduction of Rs 75,000.

The finance minister revised the income tax slabs under the new regime, saying that it will help boost household consumption, savings and investment.

New Direct Tax Bill

The Union finance minister announced that the Centre will introduce a new Direct Tax Bill in Parliament next week. The new legislation “will be clear and direct in text” and will be “simple to understand” for taxpayers and tax administration”, she said.

Fiscal deficit

Sitharaman said that India’s revised fiscal deficit is 4.8% of the gross domestic product in the financial year 2024-’25. The fiscal deficit target for the next financial year will be 4.4%. “Our endeavour will be to keep the fiscal deficit each year such that the central government debt remains on a declining path as a percentage of the GDP,” she said.

A fiscal deficit arises when the government’s expenditure is more than the revenue it generates in a given financial year.

In the financial year 2025-’26, the government’s estimated receipts are Rs 35 lakh crore and the proposed expenditure is Rs 50 lakh crore.

The estimate for revised receipts other than borrowings is Rs 31.4 lakh crore in 2024-’25, of which the net tax receipts are Rs 25.5 lakh crore. The revised expenditure estimate is Rs 47.1 lakh crore, of which the capital expenditure is about Rs 10.1 lakh crore.

For gig workers

The finance minister proposed to provide identity cards and registration on the government’s e-Shram portal. Gig workers will also be provided healthcare benefits under the Pradhan Mantri Jan Arogya Yojana national health insurance scheme. The measure is expected to help nearly one crore gig workers, Sitharaman said.

FDI limit in insurance sector hiked

The limit for foreign direct investment in the insurance sector will be increased to 100% from the current 74%, the finance minister announced. The new limit will be available for companies that invest the entire premium in India. “The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified,” she added.

Financial support to states for infrastructure

The Centre proposed an outlay of Rs 1.5 lakh crore towards 50-year interest-free loans to states for capital expenditure and “incentives for reforms”.

Scheme to boost agricultural productivity

The Centre said that it will, in partnership with state governments, implement the Dhan Dhanya Krishi Yojana in 100 districts with low productivity, moderate crop intensity and below-average credit parameters.

Sitharaman said that the scheme aims to increase agricultural productivity, help farmers adopt crop diversification and sustainable agriculture practices and improve post-harvest storage facilities, among other objectives.

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