Informed by the
July 2024 Budget proposals BJP’s manifesto commitments Industry recommendations (BCAS, CTC, IMC, FICCI, FOFE) Geopolitical & economic realities The upcoming Direct Tax Code (DTC) framework
This budget seeks to accelerate India’s economic momentum through employment creation, infrastructure expansion, foreign investment, tax simplification, and social welfare—while maintaining fiscal prudence.
- Taxation Reforms: Balancing Relief & Revenue Generation
Direct Taxes
Personal Taxation: Relief for the Middle Class
Increase basic exemption limit from ₹3 lakh to ₹5 lakh under the new tax regime.
Increase Standard Deduction for salaried employees to ₹75,000 (from ₹50,000).
Extend 80C limit from ₹1.5 lakh to ₹2.5 lakh to encourage savings.
Tax-free interest on FDs up to ₹75,000 for senior citizens.
Corporate Taxation: Incentives for Growth
15% tax rate for new domestic manufacturing units beyond March 2024.
5-year tax holiday for AI, semiconductor, robotics, & EV battery industries.
Unified capital gains tax structure with indexation benefits for all assets.
Direct Tax Code (DTC) Readiness
The tax system will align with the upcoming DTC while ensuring stability in taxation policies.
- Indirect Taxation & GST Reforms
GST Simplification
Merge 12% & 18% slabs into a single 15% slab for ease of compliance.
Reduce GST on health & life insurance premiums from 18% to 12%.
Single-window digital compliance system for MSMEs to ease tax filing.
Customs & Import Duty
Reduce import duties on semiconductor components & electronic goods.
Higher tariffs on non-essential imports to boost ‘Make in India’.
- Infrastructure & Public Sector Investments
₹12 Trillion Capex Allocation
Expansion of National Infrastructure Pipeline (NIP) to fund roads, railways, & urban projects.
Railways modernization: Faster electrification & high-speed corridors.
PSU Revamp – ₹3 trillion infusion in profitable PSUs to drive self-reliance.
Public-Private Partnership (PPP) Push
Private investments in airports, seaports, highways, & smart cities with sovereign guarantees.
Hybrid PPP models for large infrastructure projects.
- Foreign Investment & Trade Policy
SEZ Revamp & FDI Liberalization
New ‘Make in India SEZ’ model with a 10-year tax holiday for investments over $500 million.
Simplified FDI approval framework for critical sectors like defense, AI, and electronics.
Export Promotion & Trade Agreements
Fast-track FTAs with UK, EU, and GCC to boost exports.
PLI expansion for pharma, textiles & defense exports.
Capital Market Boost
Relax foreign investment norms in REITs, InvITs, & Infrastructure Bonds.
Allow higher FPI investment in sovereign bonds.
- MSMEs, Startups & Digital Economy
MSME & Startup Tax Reforms
Extend MSME credit guarantee scheme by ₹1 trillion.
Tax holiday for startups extended to 5 years (from 3 years).
New fintech & blockchain incentives to promote digital banking.
Retail & Small Investors
Launch of ‘Sachet Investment Bonds’ for small investors.
Expansion of Retail Direct Scheme to let citizens invest in government infrastructure bonds tax-free.
- Employment & Skilling
Skill India 2.0
₹50,000 crore employment-linked training scheme for youth in AI, quantum computing, and green technologies.
Expansion of apprenticeship & ITI programs with industry participation.
Startup Fund for Women Entrepreneurs
₹50,000 crore Women in Business Fund for women-led startups & MSMEs.
Daycare Tax Incentive
Companies offering daycare benefits to get an additional tax deduction.
- Agriculture & Rural Economy
Agriculture Technology Push
₹20,000 crore Agri-Tech Fund for AI-driven crop yield models, micro-irrigation & climate-based insurance.
PM Kisan scheme expanded with higher direct transfers.
Farm-to-Market Support
Interest-free loans for rural agri-processing units & farmer cooperatives.
Warehousing & cold storage infrastructure boost under PPP model.
- Energy, Sustainability & Climate Action
Green Energy Revolution
₹1 trillion solar & wind energy fund for rural rooftop solar adoption.
PLI scheme for EV battery production & hydrogen energy research.
Carbon Credit Trading System to incentivize green adoption by industries.
Public Transport Revamp
₹20,000 crore for metro rail expansion in Tier-2 & Tier-3 cities.
E-mobility infrastructure funding to support charging stations & green public transport.
- Healthcare & Education
Healthcare Expansion
Increase healthcare spending to 2.5% of GDP by FY 2026.
New public-private hospitals in underdeveloped regions.
Free healthcare under Ayushman Bharat for all BPL families.
Higher Education Push
₹1 trillion for medical colleges & research universities.
National AI & Quantum Computing University to train the next-gen workforce.
- Fiscal Discipline & Revenue Mobilization
Fiscal Deficit Target
Maintain fiscal deficit below 4.5% of GDP by FY 2026.
Strategic asset monetization rather than PSU sales.
AI-Driven Tax Compliance
AI-powered tax monitoring & automation to increase compliance.
Tax Revenue Expansion
Widen tax base without increasing rates through better compliance tracking.
Conclusion: A Forward-Thinking Budget for India’s Global Leadership
This Dream Budget 2025-26 focuses on tax simplification, infrastructure development, employment creation, foreign investment, and green energy while maintaining fiscal prudence. It aligns with the government’s long-term vision and ensures that India remains a global economic powerhouse in the years to come.
