The Union Budget for 2025 in India, presented by Finance Minister Nirmala Sitharaman, is a pivotal financial statement outlining the government’s fiscal strategy for the upcoming financial year.
The Union Budget 2025 has balanced short-term economic boosts with long-term structural reforms, aiming to make India a more competitive and inclusive economy. It reflects a nuanced approach to navigating global economic uncertainties while pushing for domestic growth and innovation.

Tax benefits for middle class
Individuals with an income of Rs 5.6 lakh or below will benefit from a tax rebate of Rs 1, 10,000, reducing their effective tax rate to 21.6%.
This proposal aims to forgo revenue of about Rs 1 lakh crore in direct taxes.

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Tax slabs and rates illustration:
The table illustrates the changes in tax slabs and rates for different income levels, comparing the present system with the proposed one for FY 2025-26.
For incomes up to Rs 8 lakh, the tax liability reduces from Rs 30,000 to Rs 20,000 with the proposed changes.
There›s a full rebate up to Rs 12 lakh income, significantly reducing the tax burden for those earning up to this amount.
Higher income brackets see a reduction in tax rates as well, with the tax after benefits shown in the last column.

major Announcements
Prime Minister Dhan-Dhaanya Krishi Yojana: This initiative will cover 100 districts with low productivity, aiming to help 1.7 crore farmers through enhanced credit parameters.
Mission for Aatmanirbharta in Pulses: A 6-year mission focusing on increasing domestic pulse production, particularly Tur, Urad, and Masoor, to improve productivity and farmer income while promoting climate-resilient seeds.

Analysis
Taxation Reform: The proposed tax changes are clearly aimed at providing relief to the middle class by lowering the effective tax rate for lower income brackets and offering substantial rebates. This could increase disposable income, potentially boosting consumption and economic activity.
Agricultural Focus: The announcements regarding agriculture reflect a strategy to enhance productivity and self-reliance in key crops, which could have long-term benefits in terms of food security, reducing import dependency, and supporting rural economies.
Economic Impact: Forgoing Rs 1 lakh crore in direct taxes might be a significant fiscal decision, potentially offset by increased economic activity due to higher disposable incomes. It›s a gamble on economic growth leading to higher indirect tax collections or other revenue sources.
Sustainability: The mission for pulses and the focus on climate-resilient seeds show an understanding of sustainable agricultural practices, which is crucial for long-term environmental health and agricultural productivity.

SUMMARY OF BUDGET
l No Income Tax on average monthly income of up to Rs 1 lakh; to boost middle-class household savings & Consumption
l Salaried class to pay Nil Income Tax up to Rs 12.75 lakh per annum in the New Tax Regime
l Union Budget recognises 4 engines of development – Agriculture, MSME, Investment and Exports
l Benefitting 1.7 crore farmers, ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ to cover 100 low agricultural productivity districts
l “Mission for Aatmanirbharta in Pulses” with a special focuses on Tur, Urad and Masoor to be launched.
I will give you all A Simple Analysis of How Union Budget Estimates have been Progressive over the years
No income tax up to Rs 12 lakhs.
Here is how income tax exemption limits have moved over the few last years.
l 2005: Rs 1 lakh
l 2012: Rs 2 lakhs
l 2014: Rs 2.5 lakhs
l 2019: Rs 5 lakhs
l 2023: Rs 7 lakhs
l 2025: Rs 12 lakhs

Economic Implications
Increased disposable
income:
The removal of tax liability for incomes up to Rs 12 lakh is expected to increase disposable income, which could lead to higher consumption, thereby stimulating economic growth. This is particularly important in sectors like FMCG and retail, which have been facing demand challenges.
Fiscal Impact:
The government anticipates a revenue loss of ₹1 lakh crore due to these tax cuts. However, this is balanced against the potential for increased economic activity and indirect tax collections from higher consumer spending.
Investment and Savings:
By reducing the tax burden, the budget encourages savings and investments. The new tax regime allows individuals more flexibility in how they use their income, potentially leading to investment in personal development, real estate, or financial markets, which could have long-term benefits for economic growth.
Social and Sectorial Focus:
Education and Healthcare:
The budget includes significant investments in education with plans to expand medical seats and establish new AI research centres, aiming at long-term human capital development. Healthcare investments are also emphasized, likely to improve public health infrastructure and services.
Agriculture and Rural Development:
Initiatives like the PM Dhan-Dhaanya Krishi Yojana target 100 districts with low agricultural productivity, aiming to improve yield and credit access for farmers. This sectorial focus is intended to bolster rural economies, which are crucial for overall economic stability.

Urban Development and Housing:
Although not detailed in the provided sources, typically, budgets with a middle-class focus might also include measures for affordable housing or urban infrastructure development to support middle-class living standards.
Political and Public Perception:

Government›s Stance: The government, through this budget, is positioning itself as pro-middle class, emphasizing economic empowerment and growth through tax relief. Prime Minister Narendra Modi has referred to it as a «people›s budget,» highlighting its focus on the common citizen›s welfare.
Here are some quotes from various industry experts on the Union Budget 2025:

On Electric Vehicles and Sustainability:
“The exemption of basic customs duty on lithium-ion battery scrap is another commendable move. It promotes a circular economy by making battery recycling more viable, reducing reliance on fresh raw material imports, and decreasing production costs and environmental impact.” – Industry Experts (Source: Hello Entrepreneurs)

On Real Estate:
“The recent budget introduces significant measures poised to invigorate the real estate sector. Allowing taxpayers to claim two self-occupied properties and increasing the TDS threshold on rent to ₹6 lakhs from ₹2.4 lakh per annum are commendable steps in the real estate sector.” – Mr. Amit Jain, Chairman and Managing Director of Arkade Developers Limited (Source: Hello Entrepreneurs)

On Healthcare:
“The 2025 budget presents a series of promising initiatives that will significantly impact cancer care in India. The full exemption of customs duty on 36 life-saving drugs, including cancer medications, is a key highlight.” – Mr. Raj Gore, CEO, Healthcare Global Enterprises Limited & Lead FICCI Cancer task force (Source: Hello Entrepreneurs)

On Manufacturing and Digital Infrastructure:
“The Union Budget 2025-26 is forward-looking and growth-centric, reinforcing the government’s commitment to strengthening India’s manufacturing sector and driving the transition to cleaner mobility solutions.” – Ms. Shradha Suri Marwah, President, ACMA (Source: electronicsera.in)

On Taxation and Economic Growth:
“The Budget 2025 delivers a comprehensive vision for India’s future. It focuses not only on driving economic growth but also on ensuring that this growth is inclusive and sustainable.” – Analysts (Source: groww.in)

On Affordable Housing and Startups:
“The budgetary announcement on affordable housing will lead to improved demand supply equilibrium, clearing the path for India’s affordable housing demand to reach 31.2 million units by 2030 and a market valuation of Rs 67 trillion.” – Lalit Beriwala, Director, Shyam Steel Industries Ltd. (Source: businessnewsthisweek.com)
These quotes reflect a broad spectrum of reactions from sector-specific impacts to overarching economic strategies outlined in the Union Budget 2025.

The budget is tailored to benefit the middle class by significantly reducing their tax burden, which aligns with the government’s narrative of promoting growth through increased consumer spending and savings. While there are criticisms regarding the depth of economic reform, the immediate financial relief to a significant portion of the population could have positive economic ripple effects. The focus on education, healthcare, and agriculture also suggests a long-term vision for sustainable growth and development. This is Budget for Pro Middle class, Consumption and Start-ups.