In a significant move to bolster India’s economic growth, Finance Minister Nirmala Sitharaman presented the Union Budget for 2025-2026, highlighting four key engines of development: exports, investments, micro, small, and medium enterprises (MSMEs), and agriculture. The budget aims to initiate transformative reforms across six critical sectors, including taxation, power, urban development, mining, the financial sector, and regulatory frameworks.
One of the standout proposals is the repositioning of India Post and India Post Payments Bank as pivotal players in the rural economy. The Finance Minister emphasized that these entities will serve as catalysts for rural development and will evolve into major public logistics companies, enhancing connectivity and services in underserved areas.
A new initiative, the Prime Minister Dhan Dhanya Krishi Yojana (PMDDKY), was also announced to support the agriculture sector. This program will be rolled out in its initial phase across 100 districts in collaboration with state governments, following the successful model of the Aspirational Districts Programme (ADP) launched in 2018. The PMDDKY aims to uplift agricultural practices and improve the livelihoods of farmers in these districts.
To further support microbusinesses, the government plans to introduce customized credit cards with a limit of up to Rs 5 lakh. In the first year, the initiative aims to distribute ten lakh of these cards, facilitating easier access to financing for small enterprises.
Recognizing the need for inclusivity, the budget also proposes a new scheme to assist women entrepreneurs and individuals from Scheduled Castes (SC) and Scheduled Tribes (ST) in starting their businesses. This program will provide term loans of up to Rs 2 crore, empowering marginalized communities to engage in entrepreneurial activities.
The budget places a strong emphasis on advancing the Make in India initiative, supporting MSMEs, and fostering employment-led development. Key focus areas include investing in the people economy, securing energy supplies, nurturing innovation, and enhancing export capabilities.
In a bid to promote domestic manufacturing, the government will launch the National Manufacturing Mission, which will encompass small, medium, and large enterprises. This mission aims to provide governance frameworks, implementation roadmaps, and policy support to central ministries and state governments, thereby enhancing the manufacturing landscape in India.
Additionally, the establishment of a Makhana Board in Bihar was announced to boost the production, processing, and value addition of Makhana, a traditional aquatic crop. With Bihar contributing approximately 85% of the nation’s Makhana production and employing around 10 lakh people in the sector, this initiative is expected to significantly benefit local farmers and processors.
The budget also addresses the pressing issue of pulse cultivation, with a focus on achieving self-sufficiency in this essential food category. India’s pulse imports have surged, reaching $3,275.25 million between April and November 2024, a 56.6% increase from the previous year. The government aims to enhance domestic production, which has been adversely affected by unfavorable monsoon conditions.
Furthermore, the National Manufacturing Mission will prioritize clean technology production, aiming to enhance local value addition in sectors such as wind turbines, solar photovoltaic modules, electric vehicle batteries, and high-voltage transmission equipment. This initiative seeks to reduce dependency on foreign supply chains, particularly from China, and support local firms in scaling operations.
In a significant development for the fertilizer sector, the Finance Minister announced the establishment of a new urea plant in Namrup, Assam, with an annual production capacity of 12.70 lakh tons. This facility will be the seventh new urea plant to commence operations in India since 2019, contributing to the country’s self-sufficiency in fertilizer production.
Lastly, the government plans to introduce a second Asset Monetization Plan for 2025-2030, with an anticipated investment of Rs 10 lakh crore in new projects. This initiative aims to enhance fiscal policies and regulations, facilitating the efficient utilization of government assets to drive economic growth.
Overall, the Union Budget 2025-2026 outlines a comprehensive strategy to stimulate economic development, empower marginalized communities, and promote sustainable practices across various sectors, setting a robust foundation for India’s growth trajectory in the coming years.
