NEW BUDGET 2025: MAJOR CHANGES AND KEY ANNOUNCEMENT

Finance Minister Nirmala Sitharaman has made history by presenting the Union Budget for 2025-26 on February 1, 2025, in Parliament. This is the 8th consecutive year that Finance Minister NIRMALA SITHARAMAN has presented the budget. The budget is expected to make significant allocations for various sectors like agriculture, industry, health, and education, which aim to provide relief to the common public and create employment opportunities. This budget is also essential for realizing an ‘Atmanirbhar Bharat’ (Self-Reliant India).

The government has announced exemptions from Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste and scrap, lead, zinc, and 12 other essential minerals. In addition, 35 more items related to electric vehicle (EV) battery manufacturing and 28 items for mobile phone battery production will be added to the list of exempted capital goods.

Emphasis on Gig economy

FM Nirmala Sitharaman declared that one crore gig workers would be given ID cards, mainly the ones who are working on platforms like Swiggy, Zomato, Zepto, and BigBasket.

She provided a few examples to illustrate the tax benefits:

• A taxpayer earning Rs 12 lakh will get a benefit of Rs 80,000, which is 100% of the tax payable under the existing system.
• An individual earning Rs 18 lakh will receive a tax benefit of Rs 70,000, amounting to 30% of the tax payable as per current rates.
• A taxpayer with Rs 25 lakh income will gain a Rs 1.1 lakh tax benefit, which is 25% of the tax payable under existing rates.

NEW TAX SLAB:

Choosing between the New and Old Tax Regime depends on an individual’s financial profile. The New Tax Regime is more suitable for those who prefer simplicity and have minimal investments. Conversely, the Old Tax Regime benefits taxpayers who maximise exemptions and deductions.

KISAN CREDIT CARD LIMIT INCREASED

“Kisan Credit Card facilitates short-term loans for 7.7 crore (77 million) farmers, fishermen and dairy farmers. The loan limit under modified interest subvention scheme will be enhanced from Rs 3 lakh to Rs 5 lakh for loans taken through the KCC,” the FM said.

Additional Infrastructure in IITs (Post-2014) and Expansion of IIT Patna

Education is a critical area of focus in the new budget. The government has allocated funds for additional infrastructure in five IITs that were set up after 2014, and IIT Patna is specifically mentioned for an expansion. This aims to improve the quality of education, increase research capacity, and cater to the rising demand for technical education. Expanding IITs will not only contribute to India’s tech and engineering prowess but will also foster innovation and contribute to overall socio-economic development.

Development of Top 50 Tourist Destinations

The government’s plan to develop the top 50 tourist destinations, particularly those linked to Buddhism, will boost India’s tourism sector. This initiative aims to enhance infrastructure around these destinations, including better transportation, accommodations, and visitor services. This will not only promote cultural tourism but will also attract international visitors, enhancing India’s global standing as a travel destination.

FDI Limit for Insurance Sector Raised to 100%

The Foreign Direct Investment (FDI) limit for the insurance sector has been raised to 100%, provided that the entire premium is invested within India. This will encourage foreign investment in the Indian insurance sector, which will bring in capital, improve insurance offerings, and potentially lower premiums for consumers. The move is expected to increase competition and improve service quality in the sector.

Rs. 20,000 Crore for Private Sector R&D

To spur innovation and technological development, Rs. 20,000 crores will be allocated to private sector research and development (R&D). This investment will support technological advancements in various fields, including healthcare, agriculture, and manufacturing, and help create a robust ecosystem for innovation in India.

Greenfield Airports to Be Developed in Bihar

In a bid to improve regional connectivity, the government is promoting the development of greenfield airports, especially in Bihar, in addition to Patna’s airport. This move will facilitate easier access to and from the region, boosting both tourism and economic activities in Bihar. This will help unlock the potential of underserved regions by improving their accessibility and connectivity to the rest of the country.

Centre for Excellence in AI – Rs. 500 Crore Investment

The government’s decision to invest Rs. 500 crores in the creation of a Centre for Excellence in Artificial Intelligence (AI) highlights its commitment to driving technological innovation. This fund will support research in AI, which is a vital area for modern industries such as healthcare, automotive, and finance. By positioning India as a leader in AI, the government aims to enhance global competitiveness and foster a culture of innovation and technology-driven economic growth.

Customs Tariff Structure Rationalization

The budget proposes a rationalization of the customs tariff structure, which means simplifying and restructuring duties and tariffs on imports and exports. This will make the trading process more transparent, reducing unnecessary barriers and improving India’s competitiveness in global trade. The new structure is expected to be more efficient, reduce trade costs, and encourage investments.

Duty Exemption on Life-Saving Drugs

The exemption of customs duties on 36 life-saving drugs will help lower the cost of these critical medicines, making them more affordable for patients. Additionally, the imposition of a 5% duty on six other life-saving drugs will help balance the need for affordable healthcare with fiscal responsibility. This move is aimed at improving access to essential medicines for those in need.