Indian Budget: Historical Overview & Latest Details

• Budget History:
  • 1860: First budget in India presented by James Wilson (considered the father of the Indian budget).
  • Post-Independence: First budget presented by K. Shanmukham Chetty.
  • Republic India: First budget presented by John Mathai.
  • Most budgets presented: Morarji Desai (10 times).
  • First woman to present budget: Indira Gandhi.
  • First full-time female Finance Minister: Nirmala Sitharaman.
  • Longest budget speech: Nirmala Sitharaman in 2020.
• Budget 2025-26 Highlights:
  • Presented by Finance Minister Nirmala Sitharaman (her 8th budget).
  • Presented on February 1st.

Vision for 'Developed India'

• Freedom from poverty.
• 100% quality schooling.
• Affordable and accessible healthcare.
• 100% skilled workforce.
• 70% female participation in economic activity.
• India as the 'Food Basket of the World'.

Budget's Journey: Four Engines, Fuel, Guide, and Destination

• Destination: Developed India.
• Guide: Inclusivity.
• Fuel: Reforms.
• Four Engines: Agriculture, MSME, Investment, Exports.

Agriculture Sector Initiatives (First Engine)

• Prime Minister Dhan Dhanya Krishi Yojana:
  • Objective: Increase agricultural productivity.
  • Launched in 100 districts.
  • Expected to benefit 1.7 crore farmers.
• Self-sufficiency Mission for Pulses:
  • Duration: 6 years.
  • Includes: Tur (Arhar), Urad, Masoor dals.
• Missions for vegetables and fruits.
• Mission for Shree Anna (Millets); 2023 was declared the International Year of Millets.
• Makhana Board to be established in Bihar.
• National High-Yielding Seed Mission to develop high-yield seeds.
• Cotton Production Mission:
  • Duration: 5 years.
  • Objective: Promote production of high-quality cotton for the textile industry.
• Kisan Credit Card (KCC) limit: Increased from ₹3 lakh to ₹5 lakh.
• Urea Plant: To be established in Namrup, Assam, with a production capacity of 12.7 lakh metric tons.

MSME Sector Initiatives (Second Engine)

• Revised MSME Definition:
  • Based on Investment:
    • Micro: up to ₹2.5 crore
    • Small: up to ₹25 crore
    • Medium: up to ₹125 crore
  • Based on Turnover:
    • Micro: up to ₹10 crore
    • Small: up to ₹100 crore
    • Medium: up to ₹500 crore
• Special credit card with a limit of ₹5 lakh launched for micro enterprises, available on the Udyam Portal.
• National Manufacturing Mission: To be launched for footwear, toy, and food processing industries to promote 'Make in India'.

Investment and Social Sector Initiatives (Third Engine)

• Atal Tinkering Labs (ATLs):
  • Objective: Promote interest in Science, Technology, Mathematics, and research among school children.
  • 500 ATLs to be established in government schools over the next 5 years.
• Indian Language Book Scheme: To provide digitally available books in local Indian languages for school and higher education.
• Five National Skill Excellence Centers to be established for 'Make for India' and 'Make for the World'.
• ₹500 crore allocated for establishing Centers of Excellence to promote AI in education.
• Cancer Care:
  • Cancer medicines made cheaper.
  • Daycare Cancer Centers to be established in all district hospitals within three years.
• Jal Jeevan Mission: Extended till 2028 (initially started in 2019, planned to end in 2024).
• Maritime Development Fund: To be created for oceanic development, with 49% government contribution.
• UDAN scheme: To identify 120 new destinations and establish connectivity over the next 10 years.
• Bihar Infrastructure:
  • Greenfield airport to be established in Bihar.
  • West Kosi Canal project to be developed in Mithilanchal.
• Gyan Bharatam Mission: To conserve over 1 crore manuscripts.

Export Sector Initiatives (Fourth Engine)

• Bharat TradeNet Platform: Launched to improve supply in exports.

Reforms (Fuel)

• FDI in Insurance Sector: Limit increased from 74% to 100%.

Fiscal and Tax Reforms

• Fiscal Deficit (as % of GDP):
  • Estimated 4.8% for 2024-25.
  • Estimated 4.4% for 2025-26.
• Tax removed from 36 life-saving medicines for rare diseases, cancer, and other serious illnesses.
• A new Income Tax Bill will be introduced, replacing the 1961 Act.
• New Income Tax Slabs (above ₹12 lakh is taxable):
  • Income up to ₹12 lakh is tax-free.
  • ₹0-4 lakh: 0%
  • ₹4-8 lakh: 5%
  • ₹8-12 lakh: 10%
  • ₹12-16 lakh: 15%
  • ₹16-20 lakh: 20%
  • ₹20-24 lakh: 25%
  • Above ₹24 lakh: 30%

Government Finances: Where the Money Comes From & Goes

• Sources of Revenue:
  • Borrowings: 24%
  • Income Tax: 22%
  • GST: 18%
  • Corporate Tax: 17%
• Expenditure Allocation (Top Areas):
  • States' Share of Taxes & Duties: 22%
  • Interest Payments: 20%
• Sectoral Expenditure Priorities:
  1. Defence
  2. Rural Development
  3. Home Ministry
  4. Agriculture