Budget 2025: FM Nirmala Sitharaman pushes for job-led inclusive growth

Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26 in Parliament on Saturday, emphasising employment-led inclusive growth while maintaining fiscal discipline. The budget focuses on investments in agriculture, MSMEs, and exports, aiming to create more job opportunities across key sectors.

Fiscal Discipline & Growth Measures

Sitharaman reaffirmed the government’s commitment to fiscal consolidation, setting the fiscal deficit target at 4.4% of GDP in 2025-26, down from 4.8% in 2024-25. The net market borrowing has been pegged at Rs 11.54 lakh crore, while the gross borrowing target for FY26 has been revised to Rs 14.82 lakh crore, a 5.7% increase from FY25.

Income Tax Relief for Middle Class

A major announcement in the budget was the exemption of income tax for annual earnings up to Rs 12 lakh. Additionally, salaried individuals with a standard deduction of Rs 75,000 will enjoy zero tax liability on income up to Rs 12.75 lakh. This measure aims to enhance disposable income and stimulate consumption, ultimately boosting economic growth.

Boost to Domestic Manufacturing

To support local industries, customs duties have been rationalised, increasing tariffs on finished goods like electronic products while lowering duties on components used by domestic manufacturers. This strategy is designed to strengthen the ‘Make in India’ initiative and enhance India’s manufacturing capabilities.

Three Engines of Growth: Agriculture, MSMEs & Investment

1. Agriculture & Rural Economy

Sitharaman described agriculture as the first engine of growth, announcing the launch of an Agricultural District Programme under the Prime Minister Krishi Yojana. The initiative will target 100 districts with low productivity, benefiting 1.7 crore farmers. Additionally, the Kisan Credit Card (KCC) loan limit will be increased from Rs 3 lakh to Rs 5 lakh under the interest subvention scheme.

2. MSMEs & Employment Generation
Recognising MSMEs as the second growth driver, the government has expanded investment and turnover limits by 2.5 times and 2 times, respectively. This move is expected to support 5.7 crore MSMEs, which contribute 36% of India’s manufacturing output and 45% of exports, thereby creating more job opportunities.

A special focus has been placed on the footwear and leather sector, with a new scheme projected to create 22 lakh jobs and generate over Rs 400 crore in revenue. Similarly, the toy industry will see targeted support under a National Action Plan, aimed at making India a global hub for sustainable and innovative toy production.

3. Investment in People & Infrastructure
Investment, the third engine of growth, will prioritise human capital development. The government will enhance cost norms for Sashakt Anganwadi and Poshan 2.0, benefiting over 8 crore children, pregnant women, lactating mothers, and 20 lakh adolescent girls across aspirational districts and the Northeast.

The Budget 2025-26 focuses on job creation, economic expansion, and fiscal stability, reinforcing India’s position as the fastest-growing major economy. By boosting domestic manufacturing, expanding MSMEs, and strengthening welfare programs, the government aims to drive sustainable and inclusive growth, paving the way for ‘Viksit Bharat’.