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Monday, February 10, 2025

Union Budget Highlights 2025: FM Nirmala Sitharaman’s Initiatives for Manufacturing, Innovation, and Infrastructure

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Finance Minister Nirmala Sitharaman is presenting the first full Union Budget of Prime Minister Narendra Modi’s third term today, marking her record eighth consecutive Budget presentation. This is a significant moment, as she is now approaching Morarji Desai’s record of presenting 10 Budgets. The 2025 Union Budget comes at a critical juncture, with India’s economic growth rate hitting a four-year low amid growing geopolitical uncertainties. The latest threat from US President Donald Trump regarding tariffs on India, combined with other global economic challenges, further intensifies the pressure on India’s economy.

The Economic Survey has highlighted the importance of financial inclusion, suggesting that the government is likely to focus on boosting rural households and small businesses in the coming Budget. Analysts expect announcements around easier credit access through microfinance institutions, self-help groups, and other intermediaries to stimulate economic growth. The Budget is expected to introduce measures that will provide targeted support to key sectors, ensuring broader financial inclusion and long-term economic stability.

Key Focus Areas of the 2025 Budget

The 2025 Union Budget will focus on ten broad areas, including:

  1. Supporting Micro, Small, and Medium Enterprises (MSMEs) and promoting exports.
  2. Enhancing agricultural growth and rural prosperity.
  3. Promoting manufacturing and financial inclusion.
  4. Ensuring inclusive growth and development, with special focus on the poor, youth, farmers, and women.

Agriculture and Fisheries Initiatives

The government is set to launch several initiatives aimed at revitalizing agriculture. A special agricultural program will target 100 low-productivity districts, with the Dhan Dhanya Krishi Yojana focusing on these areas, benefiting around 1.7 crore farmers. Additionally, a national mission to promote high-yielding seeds will be introduced, along with a five-year plan to boost cotton production in India. There will also be an enabling framework for sustainable fisheries development within India’s Exclusive Economic Zone (EEZ). Furthermore, the Kisan Scheme will see an increase in loan limits, raising the amount from Rs. 3 lakh to Rs. 5 lakh to support farmers more effectively.

MSME and Industrial Growth

The government plans to enhance the role of MSMEs in driving India’s economic growth. India Post will be transformed into a large public logistics organization, and the focus will be on supporting the 5.7 crore MSMEs in the country. A significant boost will come through an increased credit guarantee cover, raising the limit for startups from Rs. 10 crore to Rs. 20 crore. Additionally, customized credit cards with a Rs. 5 lakh limit will be issued to micro-SMEs. A new fund-of-funds with Rs. 10,000 crore support will also be established to promote startups. To foster employment and attract investments of Rs. 4 lakh crore, a new scheme for the footwear and leather sector will be introduced, creating jobs for 22 lakh people. Furthermore, the Budget will introduce plans to position India as a global manufacturing hub for the toys sector.

Manufacturing, Infrastructure, and Innovation

The government will also make significant strides in strengthening India’s manufacturing sector. A National Manufacturing Mission will be set up to further bolster the “Make in India” initiative. Additionally, a new urea plant with a capacity of 1.27 lakh tonnes will be built in Namrup, Assam. The government will also aim to create an ecosystem for solar photovoltaic (PV) cells, electrolysers, and grid-scale batteries. Innovation will be encouraged through the establishment of 50,000 Atal Tinkering Labs, promoting creativity and technical skills. In a bid to improve digital infrastructure, broadband connectivity will be extended to all government secondary schools and primary healthcare centers. The establishment of five National Centers of Excellence for skilling will further strengthen India’s vocational training and skill development ecosystem.

In conclusion, the 2025 Union Budget is expected to introduce several ambitious reforms aimed at boosting India’s economic growth. Focused investments in agriculture, MSMEs, manufacturing, and innovation, along with critical infrastructure upgrades, will help address both current challenges and future growth prospects.

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