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Informist, Saturday, Feb. 1, 2025

 

MUMBAI – Highlights of the Union Budget for 2025-26 (Apr-Mar), presented by Finance Minister Nirmala Sitharaman in Lok Sabha on Saturday:

 

FY26 ESTIMATES

* FY26 fiscal deficit pegged at 4.4% of GDP

* FY26 fiscal deficit pegged at INR 15.689 tln

* FY26 gross market borrowing pegged at INR 14.82 tln
* FY26 net market borrowing pegged at INR 11.54 tln
* FY26 nominal GDP growth seen at 10.1%
* FY26 net tax receipts seen at INR 28.37 tln
* Centre's FY26 debt-to-GDP ratio seen at 56.1% of GDP

* Aim to lower Centre's debt-to-GDP ratio to 49-51% by March 2031

* FY26 corporate tax mop-up seen at INR 10.82 tln
* FY26 excise mop-up seen at INR 3.17 tln
* FY26 net cash drawdown seen at INR 24.8 bln

* FY26 gilt repayments seen at INR 3.28 tln

* To repay INR 675 bln of bonds FY26 from GST compensation cess funds

* FY26 GST cess mop-up seen at INR 1.671 tln
* Gilt buyback seen nil in FY26

* FY26 gilt switches pegged at INR 2.5 tln
* FY26 RBI surplus, PSU financial cos dividend seen at INR 2.56 tln
* FY26 divestment, monetisation receipts pegged at INR 470 bln

* FY26 food subsidy seen at INR 2.034 tln
* FY26 petroleum subsidy seen at INR 121 bln
* FY26 fertiliser subsidy seen at INR 1.679 tln
* FY26 MGNREGA outlay INR 860 bln
* FY26 pension outgo seen at INR 2.766 tln
* FY26 outlay for NHAI at INR 1.70 tln
* FY26 defence outgo seen at INR 4.917 tln
* FY26 total transfer to states seen at INR 25.598 tln
* Net short-term borrowing seen nil in FY26

* FY26 gross tax receipts seen at INR 42.702 tln
* FY26 borrowing from small savings seen at INR 3.43 tln
* FY26 GST mop-up seen at INR 11.78 tln
* FY26 customs mop-up seen at INR 2.40 tln
* FY26 income tax mop-up seen at INR 14.38 tln

* FY26 total expenditure seen at INR 50.653 tln
* FY26 capex seen at INR 11.211 tln
* FY26 dividend from PSU cos seen at INR 690 bln
* FY26 PSU capex seen at INR 9.666 tln
* FY26 telecom receipts seen at INR 824.43 bln

 

FY25 REVISED

* FY25 fiscal deficit revised to 4.8% of GDP
* FY25 fiscal deficit revised to INR 15.695 tln

* Budget had pegged FY25 fiscal deficit at 4.9% of GDP

* Budget pegged FY25 fiscal deficit at INR 16.133 tln

* Revised total expenditure INR 47.16 tln for FY25
* Revised capex INR 10.18 tln for FY25

* Centre's FY25 debt-to-GDP ratio seen at 57.1% of GDP

* FY25 gross market borrowing revised to INR 14.007 tln

* FY25 net short term-borrowing revised to (-)INR 1.2 tln

* FY25 borrowing from small savings lowered to INR 4.12 tln

* FY25 total expenditure revised to INR 47.165 tln
* FY25 RBI surplus, PSU fincl cos dividend revised to INR 2.34 tln
* Budget saw FY25 RBI surplus, PSU fincl cos dividend INR 2.33 tln
* FY25 divestment, monetisation receipts revised to INR 330 bln

* FY25 revised food subsidy at INR 1.974 tln
* FY25 Budget pegged food subsidy at INR 2.053 tln
* FY25 revised petroleum subsidy to INR 147 bln
* FY25 Budget pegged petroleum subsidy at INR 119 bln

* FY25 revised fertiliser subsidy to INR 1.713 tln
* FY25 Budget pegged fertiliser subsidy at INR 1.64 tln

* FY25 MGNREGA outlay retained at INR 860 bln
* FY25 gilt switches revised to INR 1.47 tln vs INR 1.5 tln in Budget
* FY25 gilt buybacks seen at INR 882 bln
* FY25 pension outgo revised to INR 2.751 tln
* FY25 outlay for NHAI revised up to INR 1.69 tln
* FY25 defence outgo revised to INR 4.567 tln
* FY25 income tax mop-up revised to INR 12.57 tln
* FY25 Budget pegged income tax mop-up at INR 11.87 tln

* FY25 corporate tax mop-up revised to INR 9.80 tln
* FY25 Budget pegged corporate tax mop-up at INR 10.20 tln

* FY25 net cash drawdown seen at INR 1.401 tln

* FY25 dividend from PSU cos revised to INR 550 bln

* FY25 PSU capex revised to INR 9.304 tln
* FY25 telecom receipts revised to INR 1.234 tln

 

FISCAL HEALTH

* Budget aims to secure inclusive development

* Our econ fastest growing among all major economies

* Track record for 10 years has drawn global attention

* Confidence in India's economy, potential has grown in last 10 yrs

* Embarking on a journey to unlock nation's potential

* Geopolitical headwinds suggest lower global econ growth

* FY26 Budget to focus on invigorating investment

* Have detailed medium-term roadmap for next 6 yrs under FRBM

* To launch investment friendliness index in 2025 for states

* To give INR 1.5 tln 50-year interest-free loans to states for capex
* To allow extra borrow of 0.5% of GSDP to states for power reforms

 

FARM SECTOR
* To undertake PM's Dhan-Dhaanya Yojana in partnership with states
* Dhan-Dhaanya Krishi Yojana to focus on 100 low productivity districts

* To cover 100 districts with low output, credit under Krishi Yojana
* Dhan-Dhaanya Krishi Yojana to benefit 17 mln farmers

* To address underemployment in farm sector, encourage skilling
* PM Krishi Yojana to focus on rural youth, women
* To launch multi-sectoral resilience plan with states for rural sector
* To seek fincl assistance from multilateral bks for Krishi Yojana
* Ample opportunities to make rural migration an option, not necessity

* Farmers capable to grow for our needs and more

* To launch 6-year mission for self-reliance in pulses
* Six-year mission on pulses to focus on tur, urad, masur
* Central agencies to procure tur, urad, masur in next 4 years
* To launch programme to promote production, supply of vegetables, fruits
* To establish Makhana Board in Bihar to give farmers hand-holding
* Makhana board to provide training to farmers in Bihar

* To launch national mission on high-yielding seeds
* High-yielding seeds plan to aid research, targeted development
* To bring framework for sustainable harnessing of fisheries
* To launch mission to aid cotton farming productivity, sustainability
* Five year vision for cotton production to up farmers' income
* Special focus on Andaman, Nicobar for INR 60 bln seafood plan
* To up KISAN credit card loan limit to INR 500,000 from INR 300,000
* Five year vision for cotton production to ensure steady supply
* To set up urea plant of 1.27 mln tn capacity in Namrup, Assam

INDUSTRY, INFRASTRUCTURE

* Repositioning India Post as logistic enterprise to benefit large cos

* To expand services of India Post Payment Bank in rural areas
* MSMEs to be second engine of growth for Viksit Bharat
* To enhance investment, turnover limits for MSMEs by up to 2.5 times
* To facilitate technological upgradation of MSMEs

* To up credit guarantee cover for startups to INR 200 mln vs INR 100 mln
* Micro cos under Udyam portal to get customised credit cards
* To issue 1 mln customised credit cards for MSMEs on Udyam portal
* To set up new fund-of-funds with INR 100 bln contribution from govt
* To implement focused product scheme for footwear, leather sector
* New scheme to support mfg of non-leather footwear, pdts
* To implement scheme to make India a global hub for toys
* Leather scheme to generate employment for 2.2 mln
* To set up national institute of food tech, management in Bihar
* Bihar food processing institute to give enhanced income to farmers
* Bihar food processing institute to encourage skilling, employment
* To set up national manufacturing mission
* To set up national mfg mission for small, medium, large cos
* Additional infra to be created in 5 IITs started after 2014

* To expand hostel facilities in IIT Patna
* To set up centre of excellence in AI for education for INR 5 bln
* To add 10,000 more seats in medical colleges, hospitals in FY26
* To add 75,000 more seats in medical colleges, hospitals in 5 yrs
* To set up 200 daycare cancer centres in FY26
* To set up daycare, cancer centres in all govt hospital in 3 years
* Each infra-related ministry to make 3-yr pipeline for PPP projects
* To encourage states to seek aid from infra project development fund
* Extend Jal Jeevan Mission until 2028 with enhanced total outlay
* Jal Jeewan Mission to focus on quality infra for piped water
* To sign MoU with states under Jal Jeewan Mission
* Launches asset monetisation plan until FY30
* Asset monetisation plan to plough back INR 10 tln capital
* INR 1-tln urban challenge fund to set up cities as growth hubs
* Allocate INR 100 bln for Urban Challenge Fund for FY26
* Urban Challenge Fund to finance up to 25% of bankable projects

* To revamp Ship-building Financial Assistance Policy
* To set up five local, small modular nuclear reactors by 2033
* Nuclear energy mission worth INR 200 bln for R&D in reactors
* To amend Atomic Energy Act to raise 100 GW nuclear energy capacity
* Large ship to be included in Infra Harmonised Master List
* To improve shipbuilding clusters to up ships' range, capacity, tech
* To set up maritime development fund for INR 250 bln
* Maritime fund to enhance distributed support, promote competition
* To modify UDAN scheme to enhance connectivity to 120 new places
* Govt to contribute 49% to maritime fund, rest to come from ports

* To facilitate greenfield airports in Bihar
* Greenfield airports in Bihar, other than expansion of Patna airport

* Modified UDAN to support helipads, smaller airports in hilly areas

* To provide financial support to western Kosi canal project
* Western Kosi canal project to irrigate 50,000 hectares land
* Another 40,000 units to be completed in 2025 under SWAMIH scheme
* To set up SWAMIH fund 2 as blended finance facility worth INR 150 bln
* SWAMIH fund 2 to aid housing for 100,000 units

* To develop top 50 tourist destinations with states

* Land to develop tourist sites to be provided by states
* To take measures to boost job-led growth
* Special focus on spiritual destinations related to Lord Buddha
* To promote medical tourism, Heal in India with pvt sector
* To allocate INR 200 bln to promote R&D by private sector
* To explore fund of funds to catalyse next generation of startups
* To promote capacity building, easier Visa norm for medical tourism
* To set up second gene bank
* To launch Gyan Bharatam Mission for conservation of manuscripts
* To set up exports promotion mission
* Export promotion mission to facilitate easy access to export credit

* Export mission to be under commerce, MSME, finance ministries
* To set up National Geospatical Mission to collect infra data
* Geospatial plan to partner with GatiShakti for land reforms, planning
* To set up Bharat Trade Net as platform for trade documentation
* To boost domestic mfg to integrate econ with global supply chains
* To set up Bharat Trade Net as unified platform for trade financing
* To help MSMEs tackle non-tariff measures overseas
* To support domestic electronics industry
* Cargo screening, customs protocol to be made user-friendly
* To facilitate upgrading of infra, warehousing for air cargo
* To have framework to guide states on GCCs in emerging tier-II cities
* To provide national framework for GCCs to states

* To set up 2 shuttle looms for domestic mfg of tech textile pdts
* Propose benefits to ship leasing, treasury, insurance offices in IFSC
* Cut-off date for commencement of ops in IFSC extended by 5 yrs
 

FINANCIAL SECTOR

* FDI limit for insurance sector to be raised to 100%
* Conditions for foreign invest to be reviewed, simplified
* NABFID to set up credit facility for corp bonds in infra
* To set up forum for regulatory coordination for pension
* To implement streamlined process for periodic updating of KYC
* Banks to maintain Grameen credit score for self-help groups
* To roll out central KYC registry in 2025
* To enable speedy approval of company mergers, rationalise processes
* To widen scope of fast-track mergers
* To update old regulations under light-touch regulatory framework
* Panel to make recommendations on compliance in non-fincl sector
* High-level panel to review non-fincl sector regulatory norms
 

DIRECT TAX

* To introduce new income tax bill next week

* New income tax bill will be clear, with half the present laws
* To focus on personal income tax reforms
* To undertake personal income tax reforms to aid middle class
* No tax on income up to INR 1.2 mln
* House applauds new income tax rule
* Moot 5% tax on INR 400,000-INR 800,000 income under new regime
* Moot 10% tax on INR 0.8 mln-INR 1.2 mln income under new regime
* Moot 15% tax on INR 1.2 mln-INR 1.6 mln income under new regime
* Moot 20% tax on INR 1.6 mln-INR 2.0 mln income under new regime
* Moot 25% tax on INR 2.0 mln-INR 2.4 mln income under new regime
* Moot 30% tax on income above INR 2.4 mln under new regime
* Those with INR 1.8 mln income to get tax benefit of INR 70,000
* Total revenue foregone from direct tax changes seen at INR 1 tln
* Taxpayers with income of INR 2.5 mln get benefit of INR 110,000
* Focus on encouraging voluntary compliance, ease of doing business
* Threshold amount for TDS to be increased for clarity, uniformity
* To rationalise TDS, TCS for taxpayers
* To rationalise TDS by raising threshold for deductions
* Annual TDS limit for rent raised to INR 600,000 from INR 240,000
* To remove TCS on remittance for education from loan
* Higher TDS to apply only in non-PAN cases
* To up TCS limit under liberatised remittance plan to INR 1 mln
* To omit tax collected at source on sale of goods
* Propose to decriminalise delayed payment of TCS
* Extending time limit to 4 years for filing tax returns
* To up registration time for new charitable trusts to 10 yrs vs 5 yrs
* To allow taxpayers two self-occupied properties' value as nil
* Propose scheme for arms' length price of global deals in 3-yr blocs
* Expanding safe harbour rule scope to cut international taxation litigation

* To provide safe harbour for exporters to some jurisdictions
* To extend tax sop for investment by sovereign funds by 5 years
* To extend tax sop for sovereign funds investment to Mar 31, 2030
 

INDIRECT TAX

* Proposals on customs aim to rationalise structure
* To remove 7 tariff rates from customs
* Will have only 8 tariff rates under customs, including zero rate
* Exempt social welfare surcharge on 82 tariff lines
* Have decided not to levy more than one cess or surcharge on an item
* To add 6 life-saving medicines to concessional 5% duty slab
* Full exemption and concessional duty to apply on some bulk drugs
* To exempt customs on 36 more life-saving drugs
* To exempt cobalt powder, lithium ion scrap from basic customs duty
* To exempt lead, zinc from basic customs duty
* To exempt 12 more critical minerals from basic customs duty
* To increase basic customs duty on flat LED panels to 20% from 10%
* To exempt open cells of LCDs from customs duty
* To cut customs duty on open-cell to 5%
* Propose BCD rates on knit fabric at 20% for INR 115/kg
* To exempt BCD on raw materials, parts of ship mfg for next 10 yrs
* To cut BCD to 10% from 20% on carrier-grade ethernet switches
* To add nine items to duty-free export list
* To exempt crust leather from 20% export duty
* Propose to reduce BCD on frozen fish paste to 5% from 30%
* To cut BCD to 5% from 15% on fish hydrolysates

* Moot 2+1 yr time limit for finalising provisional assessment
* To extend time limit of end use of inputs to 1 yr from 6 mos
* To allow importers, exporters to voluntarily pay interest sans penalty

* To lose INR 26 bln revenue from indirect tax proposals

* 5% customs duty on zinc waste and scrap removed
* 5% customs duty on lead waste and scrap removed
* 10% customs duty on wet blue leather removed

 

REFORMS

* Structural reforms for 10 years have drawn global attention

* To march forward transformatively to fulfill Viksit Bharat aim

* Viksit Bharat aims zero poverty, access to high quality healthcare

* Aims at transformative reforms across 6 domains in next 5 years
* Propose measures across 10 broad areas for FY26
* To focus on poor, youth, farmers, women
* To focus on farm growth, rural prosperity, mfg, fincl inclusion
* To focus on agriculture, MSME, investment, exports for growth
* To focus on taxation, power sector, urban development
* Reforms to augment growth in 5 yrs
* To focus on mining, financial reforms

* Aim to uplift household sentiment

* Want to enhance spending by middle class

* To transform India Post into a large public logistics organisation

* Repositioning of India Post as logistic enterprise to benefit MSMEs

* To support NCDC for lending to cooperative sector
* To launch scheme for 500,000 backward class women entrepreneurs
* To take measures to promote jobs in labour-intensive sectors
* To take online capacity building for women entrepreneurs
* Scheme for SC/ST women will enable term loans of up to INR 20 mln

* To launch Saksham Aanganwadi and POSHAN 2.0

* Saksham Aanganwadi, POSHAN 2.0 to give support to 80 mln children

* 50,000 Atal tinkering labs to be set up in govt schools over 5 yrs
* To provide broadband connectivity to all govt secondary schools
* To give broadband connectivity in rural primary health facilities
* Atal tinkering labs to aid curiosity, scientific temperament
* To provide digital Indian language books in schools
* To set up five National Centres for Excellence in skilling
* To implement scheme for upliftment of urban livelihood
* To give street vendors UPI linked cards with INR 30,000 limit
* Online platform gig workers to get health insurance
* SVANidhi scheme to enhance capacity building for street vendors
* To incentivise urban sector reforms related to governance, planning
* To raise time period of exports for handicrafts to 1 yr from 6 mos
* Can extend time period of handicrafts exports by 3 mos beyond 1 year

 

End

 

Compiled by Vinod Bhovad

Filed by Vandana Hingorani

 

 

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