Key developmental initiatives spanning ten strategic focus areas, emphasizing the empowerment of the Garib, Youth, Annadata, and Nari are:

• Spurring Agricultural Growth and Productivity
• Building Rural Prosperity and Resilience
• Taking Everyone Together on an Inclusive Growth path
• Boosting Manufacturing and Furthering Make in India
• Supporting MSMEs
• Enabling Employment-led Development
• Investing in people, economy and innovation
• Securing Energy Supplies
• Promoting Exports and
• Nurturing Innovation

Key Sectoral Announcements made by FINMIN are as follow:

• For the journey to the destination ‘Viksit Bharat’, the four powerful engines will be Agriculture, MSME, Investment, and Exports.
• Reforms will be initiated in taxation, urban development, mining, financial sector, power, and regulatory frameworks to improve economic efficiency and governance.

This budget sets the stage for sustained economic transformation, ensuring long-term growth, job creation, and social development across diverse sectors. The following sections delve deeper into the sector-specific highlights.

Sectorial Highlights

Agriculture and Rural

• Agricultural accelerator fund to be setup to support young rural entrepreneurs' agritech startups.
• Short term loans of ₹5 lakh to help 7.7 cr farmers, fishermen, and dairy farmers.
• PM Dhan-Dhaanya Krishi Yojana - Developing Agri Districts Programme to help 1.7 cr farmers.
• Mission for Cotton Productivity for five years to help Extra Long Staple Cotton varieties for quality cotton.
• Makhana Board In Bihar To Be Created To Improve Processing, Value Addition.
• Tur, Urad, Masur to get special focus in plan to achieve Aatmanirbharta in Pulses.
• India Post as a Catalyst for the Rural Economy - DBT, cash out and EMI pickup, Credit services, Insurance, and digital services.
• Agri Plan To Cover 100 Districts With Low Productivity.

MSME Incentives

• For micro enterprises, customised credit cards to be issued.
• Term loans of up to ₹2 crore for 5 lakh first-time entrepreneurs, including women, SCs, and STs, over the next five years.
• Manufacturing Mission will focus on ease of business, workforce readiness, MSME growth, technology access, quality production, and clean-tech manufacturing for sustainable development.
• Measures for Labour Intensive Sectors - footwear & leather sectors, toy sector, food processing.
• Significant enhancement of credit availability with guarantee cover for: -
  • MSEs – Revised to 10 from 5
  • Startups - Revised to 20 from 10
  • Exporters MSMEs - For Term Loans Up To 20 Crore
• Revision in classification criteria for MSMEs with increase in investment and turnover.

Social Sector

• Saksham Anganwadi and Poshan 2.0m programme to provide support for 8 crore children.
• GIG workers to be provided healthcare, will assist 1 crore GIG workers.
• Jal Jeevan mission extended till 2028 to ensure 100 percent coverage. Since 2019, 80 percent coverage of rural population has been achieved.
• Jan Vishwas Bill 2.0 to be introduced to decriminalise over 100 provisions.
• Welfare of Online Platform Workers: Registration on thee-Shram portal & healthcare under PM Jan Arogya Yojana.

Education

• Atal Tinkering Labs will be established in 50,000 government schools over the next five years.
• Expanding medical education, noting that over the past 10 years, nearly 1.1 lakh undergraduate and postgraduate medical seats have been added—an increase of 130%.
• 10,000 additional seats with the goal of adding 75000 seats in next 5 years.
• Additional infra to be created in 5 IITs started after 2014 for 6500 more students.
• Centre of excellence in AI for education with total outlay of ₹ 500 crores.
• Bhartiya Bhasha Pustak Scheme: provide digital form Indian language books for school and higher education.

Health

• Daycare cancer centres in all district hospitals In FY 2025-26 alone, 200 centres will be set up.
• Patient assistance programs run by pharmaceutical companies will be fully exempt from Basic Customs Duty (BCD), provided the medicines are supplied free of cost to the patients.
• To provide relief for cancer patients, those suffering from rare diseases, and chronic conditions, the government will add 36 life-saving drugs to the list of medicines fully exempt from basic customs duty.
• Six life-saving medicines will be added to a list with a concessional customs duty of 5%. Full exemption and concessional duty will apply to bulk drugs used for manufacturing these medicines.

Infrastructure and Defence

• 3-year pipeline of projects by states to be given that can be implemented in private-public partnership (PPP) mode.
• Each infrastructure-related ministry is to come up with a 3-year plan to be implemented in PPP mode.
• The outlay of ₹1.5 lakh crore is proposed for 50-year interest-free loans.
• To develop foundational geospatial infrastructure and data. Using PM Gati Shakti, facilitation of modernization of land records, urban planning, and design of infrastructure projects.

Banking & Financial

• Revamped Central KYC registry to be rolled out in 2025.
• NaBFID to set up a ‘Partial Credit Enhancement Facility’ for corporate bonds for infrastructure.
• PM SVANidhi: To be revamped with enhanced loans from banks, UPI linked credit cards and capacity building support.
• Maritime Development Fund with a corpus of ₹25,000crore for long-term financing with up to 49 % contribution by the government.
• Rationalisation of requirements and procedures for speedy approval of company mergers.
• ‘Grameen Credit Score’ framework to serve the credit needs of SHG members and people in rural areas.
• FSDC Mechanism: to evaluate impact of the current financial regulations and subsidiary instructions along with a framework to enhance their responsiveness and development of the financial sector.

Tourism

• UDAN has enabled 1.5 crore middle class people connecting 88 airports, with 619 routes. Modified UDAN to be launched to 120 new destinations.
• India to give Visa Free Waivers for certain tourists.
• Top 50 tourist destinations in India will be developed in collaboration with the States.
• MUDRA loans for homestays.
• Ease of travel and connectivity to tourist destinations.
• Performance-linked incentives to states.
• Intensive skill-development programmes for our youth.

Export

• To improve export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets.
• ‘Bharat Trade Net’ (BTN), Unified platform for trade documentation and financing solutions to be set up as a digital public infrastructure for international trade.
• As guidance to states for promoting Global Capability Centres in emerging tier 2 cities.
• To facilitate upgradation of infrastructure and warehousing for air cargo including high value perishable horticulture produce.

Miscellaneous

• Urban Challenge Fund - ₹1 lakh crore to implement the transformation of cities into growth hubs, support creative redevelopment, and enhance water and sanitation infrastructure.
• Nuclear Energy Mission for Viksit Bharat: Development of 100 GW by 2047.
• Small Modular Reactors (SMRs) will be launched with an outlay of ₹20,000 crore.
• Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be introduced.
• Another booster for Bihar-A National Institute of Food Technology, Entrepreneurship, and Management will be established in Bihar, aimed at boosting food processing activities across the eastern region. This initiative will have two key outcomes: first, it will enhance farmers' incomes by adding value to their produce, and second, it will create skilling, entrepreneurship, and employment opportunities for the youth in the region.
• Allocating ₹ 20,000 crore to implement private sector driven Research, Development and Innovation initiative.
• To provide ten thousand fellow ships for technological research in IITs and IISc.
• Asset Monetization Plan 2025-30: launched to plough back capital of ₹ 10 lakh crore in new projects.
• Greenfield airports, Financial support for the Western Koshi Canal ERM Projects.
• SWAMIH Fund-2 : ₹ 15,000 crore for expeditious completion of one lakh dwelling units through blended finance.
• The 2nd Gene Bank with 10lakh germplasm lines to be setup for future food and nutritional security.
• Documentation and conservation of our manuscript heritage to cover more than 1 crore manuscripts. National Digital Repository of Indian knowledge systems for knowledge sharing to be set up.

Direct Taxation Highlights

Individual tax

• Removal of notional rent for second self-occupied property without any condition.
• Exemption from taxation of withdrawals made by individual from NSS and NPS Vatsalya account, on or after 29th August 2024.
• No income tax payable under new regime up to Rs 12 lakh (excluding income taxed at special rates) with following revised slab rates under new regime:
• 0 – 4,00,000 – NIL
• 4,00,000 – 8,00,000 – 5%
• 8,00,000 – 12,00,000 – 10%
• 12,00,000 – 16,00,000 – 15%
• 16,00,000 – 20,00,000 – 20%
• 20,00,000 – 24,00,000 – 25%
• above 24,00,000 – 30%

Assessment and Appeals

• Extension of time limit from 2 years to 4 years to file updated income tax returns.
• Digitalization of giving effect of appellate orders now operational.

Charitable Trust

• Period of regular registration for small charitable trusts/ institutions increased from 5 years to 10 years.
• Relaxation for charitable entities from disproportionate consequences for minor defaults such as incomplete applications.

International taxation

• New scheme for determining arm's length price of international transaction for a block period of three years.
• Scope of safe harbour rules expanded.
• Introduction of safe harbour for tax certainty for non-residents store components for supply to specified electronics manufacturing units.
• Benefit of Tonnage Taxation extended to inland vessels registered under Indian Vessels Act.
• Specific Benefits to ship-leasing units, insurance offices and treasury centres of global companies, set up in IFSC. Cut-off date to claim the benefit extended to 31st March 2030.

Others

• New Income tax bill reducing number of sections and volume to 50% of current Act to be released in a week
• Certainty in tax rates for gains from securities for Category I and Category II AIFs.
• Extension of time limit by five years upto 31st March 2030 to Sovereign Wealth and Pension Funds for investment in infrastructure sector.
• Extension of time limit by five years , upto 31st March 2030 for new start-up registration for benefits under Section 80-IAC.

Changes proposed in TDS/ TCS provisions

• Removal of provision for higher TDS rates under section 206AB, in case of non-filers of Income tax return.
• Decriminalization of default in TCS payment upto due date

Indirect Taxation Highlights

Central Goods And Services Tax Act, 2017

• Time of Supply : Time of supply provisions for vouchers has been omitted.
• Blocked ITC : In Section 17(5)(d), the term “plant or machinery” has been replaced with “plant and machinery” for clarity.
• Input Service Distributor (ISD) : Mandatory ISD registration for credit distribution, effective April 1, 2025.
• Credit Notes : Credit notes cannot be adjusted from output tax liability if:
• ITC has not been reversed by the recipient, or
• Tax incidence has been passed on to another person.
• Pre-Deposit Requirement for Penalty Appeals:
• Appeal to Appellate Authority: Pre-deposit reduced to 10% of the penalty amount (previously 20%).
• Appeal to Appellate Tribunal: Additional 10% of penalty required amount payable under Section 107(6).
• Track & Trace Mechanism for High-Risk Commodities:
• Implementation of Unique Identification Marking (UIM) for specified goods.
• Compliance Requirements:
  • Furnish details of installed machinery, capacity, and operational duration, and others.
  • Non-compliance Penalty: ₹1 lakh or 10% of tax payable, whichever is higher.
• Addition to Schedule III – SEZ & FTWZ Transactions
• Supply of warehoused goods in SEZ/FTWZ before clearance for export or DTA sale is neither a supply of goods nor services, No refund available if tax has already been paid.

Customs:

Key Changes in Customs Act:

• Provisional Assessment: Now assessed provisionally, finalized in 2 years (extendable by 1). Delays due to legal issues won’t count in the time limit.
• Post-Clearance Entry Revision (Sec 18A): Importers/exporters can revise entries after clearance, pay shortfall with interest, and claim refunds if excess paid. Not allowed in audits or investigations.
• Refund & Demand: Refunds under Sec 18A allowed within 1 year; duty revisions included in Sec 28 demand timelines.
• Settlement Commission Replaced: From April 1, 2025, the Interim Board will handle pending applications.

Central Excise:

Key Amendments in Central Excise Act:

• Interim Board for Settlement:
  • Replaces the Settlement Commission from April 1, 2025.
  • Will handle pending applications that meet specific conditions.
  • Comprises three senior CBIC officers.
• Pending Applications:
  • Applications filed before April 1, 2025, with no final order issued.
  • Will be processed by the Interim Board.
• Repeal of Settlement Commission Provisions:
  • From April 1, 2025, sections related to the Settlement Commission will cease to apply.
  • Powers and functions transferred to the Interim Board.

Basic Customs Duty:

36 life-saving drugs—with an additional 37 medicines qualifying under patient assistance programs—to lower healthcare costs. Customs duty has also been scrapped on waste and scrap of a dozen critical minerals (including cobalt, lead, zinc, and lithium-ion battery scrap) to boost domestic manufacturing.

Meanwhile, the duty on certain electronic inputs (like PCBA, camera modules, and related components) has been reduced to nil, making smartphones and TVs more affordable.

To correct an inverted duty structure, the BCD on interactive flat panel displays has been raised from 10% to 20%.

Social Welfare Surcharge: Additionally, the social welfare surcharge is now exempt on 82 tariff lines, easing the overall tax burden on industries