Shopkeepers take a tea break as they wait for customers at a wholesale market in Kolkata, India, April 12, 2024. REUTERS
NEW DELHI, Feb 1 – India will focus on boosting the spending power of its middle class population, encouraging inclusive development and private investment to strengthen growth, Finance Minister Nirmala Sitharaman said on Saturday, announcing the annual budget.
Measures to assist the poor, youth, farmers and women will also be included in the budget for 2025-26, said Sitharaman, highlighting plans for “transformative reforms in taxation”.
Here are the highlights of the budget:
LOWER FISCAL DEFICIT
* Proposes lower fiscal deficit at 4.4% of GDP in 2025/26 vs revised deficit of 4.8% of GDP in current fiscal year
* Gross borrowings seen at 14.82 trillion rupees for 2025/26
* Net borrowings seen at 11.54 trillion rupees for 2025/26
TAX COLLECTIONS
* Net tax revenue receipts for 2025/26 seen at 28.37 trillion rupees
* Total revenue receipts for 2025/26 seen at 34.96 trillion rupees
RAISES FDI LIMIT
* Proposes to raise foreign direct investment limit in insurance to 100% from 74%
* Taxation, power sector, urban development, mining, financial sector and regulatory reforms focus of budget
LOWER TAX RATES
* Nil personal income tax slab to be raised to 1.2 mln rupees
* To reduce basic customs duty on some marine products
* To exempt 12 more critical minerals from basic customs duty
* To exempt 36 life savings drugs from customs duty
FARM OUTPUT
* To launch six year mission to boost pulses output
* To launch five year mission for cotton production
MANUFACTURING INCENTIVES
* To set up National Manufacturing Mission to provide policy support and to further ‘Make in India’ manufacturing programme
* Credit guarantee cover for small and medium firms enhanced to 100 million rupees
* Fund of funds to be set up for start-ups with government contribution of 100 billion rupees
* To set up five national skilling centres to enhance skilled manpower for manufacturing
* To provide 1.5 trillion rupees 50-year interest free loans to states for infrastructure development
* Announces Maritime Development Fund with a corpus of 250 billion rupees
* To set up Urban Challenge Fund worth 1 trillion rupees
* To enhance regional air connectivity to 120 new destinations over 10 years
* Policy for critical minerals development to be launched
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Reporting by Manoj Kumar; Editing by YP Rajesh
