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.
