The following are the highlights of the Union Budget 2025-26.
Expenditure
The government is estimated to spend Rs 50,65,345 crore in 2025-26, 7.4% higher than the revised estimate of 2024-25. Interest payments account for 25% of the total expenditure, and 37% of revenue receipts.
Receipts
The receipts (other than borrowings) in 2025-26 are estimated to be Rs 34,96,409 crore, about 11.1% higher than the revised estimate of 2024-25. Tax revenue which forms a major part of the receipts is also expected to increase by 11% over the revised estimate for 2024-25.
GDP
The government has estimated a nominal GDP growth rate of 10.1% in 2025-26 (i.e., real growth plus inflation).
Deficits
Revenue deficit in 2025-26 is targeted at 1.5% of GDP. This is lower than the revised estimate of 1.9% in 2024- 25. Fiscal deficit in 2025-26 is targeted at 4.4% of GDP, lower than the revised estimate of 4.8% of GDP in 2024-25.
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.
Policy Highlights
Finance and Economy
The FDI limit for the insurance sector will be increased from 74% to 100% for companies which invest their entire premium in India. A new income tax bill will be introduced.
Governance
A high-level committee for regulatory reforms will be set up for reviewing all non-financial sector regulations, certifications, licenses, and permissions. The committee will make recommendations within a year. A mechanism will be set up under the Financial Stability and Development Council to evaluate the impact of current financial regulations. It will also formulate a framework for development of the financial sector. An investment friendliness index of states will be launched in 2025. Jan Vishwas Bill 2.0 will be introduced to decriminalise over 100 provisions across multiple laws.
Industry and Commerce
To improve credit access, credit guarantee cover will be increased: (i) from Rs 5 crore to Rs 10 crore for micro and small enterprises, (ii) from Rs 10 crore to Rs 20 crore for start-ups, and (iii) up to Rs 20 crore for exporter MSMEs. Investment and turnover limits for classification of MSMEs will be at least doubled. For micro enterprises registered on the Udyam portal, 10 lakh credit cards with a credit limit of Rs 5 lakh will be provided within the first year of the scheme.
Infrastructure
Each infrastructure-related ministry will formulate a three-year pipeline of projects that can be implemented in public-private partnership mode. A second asset monetisation plan will be launched for 2025-30. National Geospatial Mission will be started to modernise land records and urban planning. India Post will be transformed as a large public logistics organisation and will be repositioned to provide several services in rural areas. A modified UDAN scheme will be launched to improve connectivity to 120 new destinations and carry four crore passengers in next 10 years. A Maritime Development Fund with a corpus of Rs 25,000 crore will be set up, with 49% contribution by the government. Broadband connectivity will be provided to all government secondary schools and primary health centres in rural areas.
Energy
Additional borrowing of 0.5% of GSDP will be allowed to states based on electricity distribution reforms and augmenting intra-state transmission capacity. The Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be amended to allow private sector partnerships for development of nuclear energy. A Nuclear Energy Mission will be launched for the development of small modular reactors with an outlay of Rs 20,000 crore.
Urban and Rural Development
Urban Challenge Fund of Rs 1 lakh crore will be set up to implement projects for development of cities. A scheme worth Rs 15,000 crore will be established to complete the construction of one lakh housing units in stressed projects.
Agriculture
The Union government will launch a six-year mission to achieve self-reliance in pulses. Central agencies will procure three pulses, as much as offered, from farmers over the next four years. In addition, programmes will be launched for availability of high-yield variety seeds and increasing cotton productivity. Prime Minister Dhan-Dhaanya Krishi Yojana will be implemented to improve productivity and crop diversification in 100 low-productivity districts. Loan limit under the Modified Interest Subvention Scheme will be increased from Rs 3 lakh to Rs 5 lakh rupees for loans availed through the Kisan Credit Card.
Labour and Employment
PM SVANidhi Scheme to provide affordable loans to street vendors will be revamped to provide UPI-linked credit cards with Rs 30,000 limit, enhanced bank loan, and capacity-building support. Gig workers will be provided access to healthcare under Ayushman Bharat. A scheme will be launched to provide loans up to Rs 2 crore to five lakh women, scheduled castes, and scheduled tribes first-time entrepreneurs. Another scheme for socio-economic upliftment of urban workers will be implemented to help improve incomes.
Education
In the next year, 10,000 additional seats will be added in medical colleges and hospitals with a goal of adding 75,000 seats in the next five years. Additional infrastructure will be created in five IITs started after 2014 to facilitate education for 6,500 more students. Under the PM Research Fellowship scheme, 10,000 fellowships will be provided for technological research in IITs and IISc.
