Union Budget 2025 Highlights: Income Tax Relief, Sectoral Reforms & More in Sitharaman's 'Aam Aadmi' Budget

Welcome to the live update of Union Budget 2025-26 to be tabled in the parliament today by Finance Minister Nirmala Sitharaman. This marks the 8th consecutive budget of Sitharaman, which makes her the first Indian finance minister in history to achieve this feat.

Before Sitharaman, former Prime Minister Morarji Desai presented 10 Union Budgets, six of them consecutively.

The budget will be presented against the backdrop of a slowdown in the economy and long-standing concern over inflation. India’s real gross domestic product (GDP) is projected to grow at a four-year low of 6.4% in the FY25, primarily driven by weak industrial and investment growth. This marks a significant drop from its 8.2% growth registered in the last fiscal. 

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FM Sitharaman's Speech Time: The finance minister will present the budget at 11 am in the Parliament today (February 1, 2025).

Live Streaming: The budget will be streamed live on Parliament's official channels, including Doordarshan, Sansad TV, and the government's official YouTube channels. One can also check all the LIVE updates on Indian Budget 2025 here.

Subdued demand has been dragging India’s economic growth for a while now and single digit wage growth in corporate sector on top of it has even raised concerns among the policymakers. India’s private consumption fell from 58.1 per cent of its GDP in 2021-22 to 55.8 per cent in 2023-24. Meanwhile, urban consumption has been declining for five quarters. Read more here

The Economic Survey 2024-25, presented by Finance Minister Niramala Sitharaman yesterday, has projected that India’s gross domestic product (GDP) will grow between 6.3% and 6.8% in the next fiscal year.

The survey highlighted that private final consumption expenditure (PFCE) at constant prices is estimated to grow by 7.3%. It said that this growth will be primarily driven by a rebound in rural demand. Read more here

A 10.9% spike in food prices spiked India's retail inflation to a 14-month high of 6.2% in October last year. Even as policymakers looked towards the RBI anticipating a rate cut to boost growth, citing high inflation in the country, the central bank has been maintaining its repo rate at 6.5% for two years now. Even as the inflation rate has moderated to 5.22% in December, it still hovers above the central bank’s medium-term tolerance band of 4%.

With the economy slowing down, stagnating wages and surging prices – 2024 was far from being a happy year for the middle class. Now, the country awaits eagerly to see how this budget will shape their 2025.

Representatives of industry bodies, during the usual pre-budget meeting with the finance minister, in December last year urged for a reduction in personal income tax rates to increase disposable income for the middle class. They also sought a cut in excise duty on fuel and measures to boost employment-intensive sectors.

The Economic Survey 2024-25 in the parliament on Friday. The survey pushed for more deregulation and highlighted the need to give more economic freedom to individuals and organisations to drive growth. 

1. Startup Investors seek tax relief on Employee Stock Ownership Plans (ESOPs), suggesting that taxation should occur when shares are sold, aligning with employees' financial ability to pay. 

2. Investors also urge the government to reduce entry barriers for foreign investment, simplifying processes and allowing Alternative Investment Funds (AIFs) to invest outside India without permission. 

3. They seek reform in capital gains tax, citing the US example where reducing tax from 28% to 20% boosted venture capital investments, and expect similar benefits for India's start-up ecosystem. 

Old Tax Regime 

Up to Rs 2,50,000  - Nil 

Rs 2,50,001 - Rs 5,00,000 - 5%  

Rs 5,00,001 - Rs 10,00,000 - 20%  

Rs 10,00,001- Rs 50,00,000 -  30%  

Rs 50,00,001- Rs 100,00,000 -  30% + 10% surcharge 

New Tax Regime

Up to Rs 3,00,000 -  Nil 

Rs 3,00,001 - Rs 7,00,000 - 5% 

Rs 7,00,001 - Rs 10,00,000 - 10%  

Rs 10,00,001 - Rs 12,00,000 - 15% 

Rs 12,00,001 - Rs 15,00,000 - 20% 

Rs 15,00,001- Rs 50,00,000 -  30%  

Rs 50,00,001- Rs 100,00,000 - 30% + 10% surcharge 

According to the Survey, the number of GCCs in India has grown from approximately 1430 in FY19 to over 1700 in FY24. As per its employability aspect, GCCs in India employ nearly 1.9 million professionals. 

As India’s GCC (Global Capability Centre) is expanding rapidly, the ecosystem is expected to grow from 6,500 to over 30,000 by 2030, supported by robust training programs to develop leadership. 

Days ahead of the union budget, Congress has released 'Real State of the Economy 2025' report on Thursday, prepared by former party MP Rajeev Gowda and his team. In this report, the opposition party has slammed the government for handling of economy with "no jobs, raging inflation, stagnating wages and huge income inequality." 

"Youth unemployment is close to 40%. There are no jobs despite the PM handing out letters to people from time to time. That is just filling vacant posts and does not involve creation of new jobs," said Congress leader and former finance minister P Chidambaram. 

1. The hospitality industry is seeking infrastructure status for hotels under the RBI's Harmonised Master List (HML).  

2. They also demand single-window clearance and NOC to boost "ease of doing business." 

3. According to the Hotel Association of India (HAI), other proposals include lowering the GST rate from 18% to 12%, aligning it with competing Asian countries. 

• As the government prepares its budget for FY25, market experts are expecting a mix of fiscal prudence and growth-oriented measures. 

• Key expectations for the 2024 budget include measures to boost consumer spending.  

• The market also expects the govt to boost the manufacturing sector, particularly through the expansion of the Production-Linked Incentive (PLI) schemes. 

“Increasing income wages is not a moral ask but in self interest of the private sector, as it has a direct impact on aggregate demand,” said CEA Nageswaran in Economic Survey 2025. 

FM Sitharaman's Budget team includes key figures from the Ministry of Finance and other agencies: 

- Tuhin Kanta Pandey: Finance and Revenue Secretary 

- V Anantha Nageswaran: Chief Economic Adviser 

- Ajay Seth: Department of Economic Affairs Secretary 

- Manoj Govil: Expenditure Secretary 

- M Nagaraju: Financial Services Secretary 

- Arunish Chawla: DIPAM Secretary 

CEA V Anantha Nageswaran termed globalisation a "thing of the past" as nations recalibrate towards domestic priorities. "China is rapidly advancing its market share in critical technologies," he added. 

• Experts say that the agricultural sector faces challenges like conversion of agricultural land for non-agricultural purposes, soil degradation, unpredictable rainfall, and limited financial resources. 

• Climate change poses a significant threat to food security and productivity, alongside threats from global competitors with low prices. 

• Experts ask for a shift from financial aid to capacity-building initiatives for a more resilient and employable agricultural workforce. 

• They demand the reintroduction of 200% income tax deduction on investments in R&D and registration studies. 

• MSMEs' are calling for simple regulations related to cross-border payments to facilitate Indian businesses selling products in foreign markets. 

• Additionally, there's a recommendation to reduce Income Tax rates for proprietorship, Partnership firms, and LLPs to 25% for old and 15% for new enterprises. 

• The government is also urged to include service exports in the eligibility for interest equalisation, given the country's higher target for service exports. Read More

The stock exchanges are keeping the market open for a special trading session on account of Budget 2025. Trading will start at 9:15 AM and close at 3:30 PM. Experts expect volatility as Finance Minister Nirmala Sitharaman is set to present her eighth consecutive Budget.

Indian Finance Ministers used to bring the Budget document in a leather briefcase. FM Sitharaman introduced the red cloth-bound "Bahi-Khata" to replace the leather briefcase in her first Budget in 2019. Since then, the Union Budget has gone entirely paperless.

Finance Minister Nirmala Sitharaman is set to present her eighth consecutive Budget. All eyes will be on her announcement around capital expenditure to boost lagging urban consumption while keeping fiscal deficit in check.

"The Union Budget 2025-2026 should facilitate the required resources for initiating HPV [Human papillomavirus] vaccination among eligible young girls under 15 years of age, in India, besides scaling population-based screening for cervical cancer among eligible women, through capacity building of mid-level providers, investment in HPV DNA testing and technology to improve the quality of screening in the outreach," said Kalpana Apte, Director General, FPA India.

• The DeepTech sector wants the government to develop a robust grant structure, not just equity-based funding.  

• In the last budget, FM Sitharaman announced a Rs 1 lakh crore corpus for deep tech for long-term loans without interest. However, experts indicate that the lack of implementation of the scheme is hindering the process.  

• Experts also demand that the government focus on clear guidelines on IP creation, faster approval processes for AI-driven start-ups, and dedicated financial support mechanisms like tax incentives and grants. Read More

"The indices are fueled with expectations of a pro-growth budget and prudent fiscal as indicated in the economic survey. Positive global cues and better-than-expected results from major companies are also contributed to the upward trend. Market expects reductions in individual tax and job generation to boost consumption. By cutting fiscal deficit but continuing to boost infrastructure spending, the government may set the tone for a potential recovery in the consolidating market," said Vinod Nair, Head of Research, Geojit Financial Services.

The CII, in its pre-budget expectations, mentioned the need for government intervention to stimulate spending by lowering marginal tax rates for personal income, particularly for those earning up to Rs 20 lakh per annum.  

The recent earnings of fast-moving consumer goods (FMCG) companies have highlighted consumption worries of India Inc.  

They want the government to allow more income in people's hands to boost lagging consumption. 

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According to Anarock, the sales share of affordable housing fell to a mere 18% in 2024 from over 38% in 2019.  

The real estate industry is seeking adjustments in the affordable housing price cap beyond the current Rs 45 lakhs to align with rising development costs in metropolitan areas, which is crucial. 

The industry is also demanding an increase in the tax deduction limit on home loan interest from Rs 2 lakhs to Rs 4 lakhs to provide tangible relief to aspiring homeowners. 

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India is on its journey to become a developed nation by 2047, a vision that requires a growth rate of around 8% at constant prices, on average, for about a decade or two as mentioned in the Economic Survey 2025

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EVs hold a 2.5% share of the total 4.3 million cars sold in 2024. 

Industry says insufficient EV charging infrastructure hinders market growth. 

India relies heavily on Chinese imports for batteries and electronic drive units. The industry wants the govt to encourage domestic production of critical EV components

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Ahead of the Budget, the benchmark indices opened on a positive note with the Sensex erasing gains soon. The BSE Sensex was trading at 77,480.29, down by 20.28 points or 0.03%, while the NSE Nifty 50 was trading at 23,528.60, up 20.20 points or 0.09%.

The Economic Survey 2024-25 in the parliament on Friday. The survey pushed for more deregulation and highlighted the need to give more economic freedom to individuals and organisations to drive growth

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Ahead of budget presentation in the parliament, the finance minister meets the President at the Rashtrapati Bhavan.

As the government prepares its budget for FY25, market experts are expecting a mix of fiscal prudence and growth-oriented measures. 

Key expectations for the 2024 budget include measures to boost consumer spending.  

The market also expects the govt to boost the manufacturing sector, particularly through the expansion of the Production-Linked Incentive (PLI) schemes. 

Read More

FM Nirmala Sitharaman will present the Union Budget 2025 in Parliament on February 1, 2025. Her speech will start at 11 am in the Lok Sabha. The Union budget will be broadcast on the official channels of the Parliament, Doordarshan, and Sansad TV. You can also catch the live Budget updates on OutlookBusiness.com 

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President Droupadi Murmu feeds Union Finance Minister Nirmala Sitharaman the customary 'dahi-cheeni' (curd and sugar) ahead of her Budget presentation.

Hindustan Aeronautics, Bharat Electronics, Mazagon Dock Shipbuilders, Garden Reach Shipbuilders & Engineers, Apollo Micro Systems and Data Patterns (India) jump up to 4%.

PM Modi arrived for the Cabinet meeting with Finance Minister Nirmala Sitharaman, where the cabinet approved the Union Budget before its presentation.

Small-cap indices cheer ahead of budget. Both Nifty small-cap 100 and BSE small-cap were up by nearly 1%.

The S&P BSE small-cap index was trading around 50,393, up by over 400 points or 0.88%.

Finance Minister Nirmala Sitharaman has begun her eighth consecutive Budget Speech.

Next five years are unique opportunity stimulating growth of all categories. The budget focuses on key areas including Gareeb, youth, annadata and Naari

Finance Minister starts her eighth consecutive budget by calling India's growth trajectory among the fastest in the world.

Taxation, Power, Urban Development, Mining, Financial Services and Regulatory Reforms.

Government will launch PM Dhan Dhanya Krishi Yogna partnership where states will cover 100 districts with low productivity and moderate yield to enhance agricultural productivity and improve irrigation facilities. It will benefit over 1.7 crore farmers.

1. Enhancing agriculture productivity.

2. Adopting sustainable agriculture practices.

3. Improve irrigation facilities.

4. Facilitate small and long term credit.

FM Sitharaman said that the government of India will launch Atmanirbharta in pulses.

Government will launch a comprehensive programme for vegetables and fruits in partnership with states to promote productivity and efficient supplies.

"Our government will launch national mission of high yielding this year," said FM Sitharaman in her budget speech.

It is aligned with the government's 'Five F Vision' for the textile sector and will benefit lakhs of cotton farmers.

"The value of India's Seafood exports stands at Rs 60,000 crore," said FM Sitharaman.

"India to focus on seafood industry with new programs in the sector," she added.

"The government enhances loan facilities from Rs 3 lakh to Rs 5 lakh for 7.7 crore farmers and fishermen under Kisan Credit Card Scheme," said FM Sitharaman in budget speech.

1. For MSMEs, the limit will be increased from Rs 5 crore to 10 crore.

2. For Startups, the limit will be increased from Rs 10 crore to Rs 20 crore.

3. For well run exporter MSMEs, the limit will be increased to Rs 20 crore.

"The government will bring out the new Fund of Fund scheme for start-ups with enhanced scope for Rs 10,000 crore," said FM Sitharaman.

"India to become a global hub for toys," said FM Nirmala Sitharaman.

"India will launch various schemes to make the nation a global hub of toys," FM Sitharaman added.

FM Nirmala Sitharaman announced the 'National Manufacturing Mission' for small and medium manufacturing units.

The clean tech manufacturing sector is set to scale up the production of EV batteries, solar panels, transmission equipment and other solar-related products.

Government will set up National Institute of Food Technology, Entrepreneurship and Management in Bihar. It will help enhance value of yield for farmers, provide skilling and employment opportunities for youth.

"Five National Centres of Excellence for Skilling will be established," said FM Sitharaman.

"Three such centres will be set up in AI with a total outlay of Rs 500 crore," she added.

The government will increase 10,000 additional seats in medical colleges, says Sitharaman in budget.

"Cancer centres in all district hospitals will be set up in the coming 3 years," said FM Nirmala Sitharaman.

FM said that the number of students in 23 IITs has increased from 65 thousand to 3.5 lakh. Additional infrastructure will be created in five IITs which started after 2014. Hostel and other capacities will be expanded in IIT Patna.

"Our workers will arrange identity cards for one crore gig workers under Jan Aarogya Yojana," said FM Nirmala Sitharaman.

FM emphasised on investment as the third engine of growth including investing in people, economy and innovation. The government is focusing on the Sashakt Anganwadi and Poshan 2.0 programmes, which provide nutritional support to more than 8 crore children, pregnant women, lactating mothers and nearly 20 lakh adolescent girls in aspirational districts and the Northeast region. The cost norms for these programmes will be increased.

"An Urban Challenge Fund of Rs 1 lakh crore will be established to develop cities as growth hubs, enhance sanitation and foster creative urban spaces, as outlined in the previous budget," said FM Sitharaman.

FM Nirmala Sitharaman announced incentivisation of electricity distribution reforms among states and enhancement of additional borrowing facility.

"A Maritime Development Fund will be established with 49% funding from the government and the remaining contribution from the private sector. The fund will provide distributed support and focus on promoting the sector's growth," said FM Sitharaman.

"Inspired by success of the Udaan Regional Connectivity Scheme, a modified Udaan scheme will be launched including 120 new destinations and carry 4 crore additional passengers in the next 10 years," said FM Sitharaman.

FM Nirmala Sitharaman announced a big infrastructure project in Bihar. A greenfield airport to be built in the state.

FM Sitharaman said that key power sector reforms are aimed at strengthening electricity distribution and transmission. The government will incentivise states to undertake reforms in electricity distribution and enhance intrastate transmission capacity to improve the financial health and operational efficiency of power companies.

"An additional borrowing allowance of 0.5% of GSDP will be given to support states in implementing these reforms, contingent on their progress in this sector," FM Sitharaman added.

"Top tourist destinations will be developed in partnership with states. Mudra loans will be extended to support tourism-related initiatives. Streamlined e-visa facilities, including waivers for select tourist groups, will be introduced," said FM Nirmala Sitharaman.

"Additionally, medical tourism will receive increased attention through state-level partnerships," added FM Sitharaman.

FM Sitharaman announced development of 100 GW by 2047 under National Energy Mission for Viksit Bharat.

FM Sitharaman, during her budget speech, announced 10,000 fellowships for IITs, IISc under "PM Research Fellowship Program" for the next five years.

A unified digital public infrastructure will be established to serve as a central portal for financing solutions and trade. This will be aligned with international practices.

FM Sitharaman said that the 'new income tax bill' will be announced next week in the budget session that will conclude on February 13.

FM Sitharaman further announced that FDI Limit for Insurance Sector will be enhanced from 74% to 100%. "Services for India Post Payment Bank will be deepened, " she said.

"The Government of India will explore deeptech fund of funds," said FM Sitharaman.

"The government will revamp the existing system to enhance ease of investment and attract global capital," said FM Sitharaman.

"The government will introduce Jan Vishwas Bill 2.0 to decriminalise over 100 provisions," said FM Sitharaman.

"The government aims to maintain a fiscal deficit trajectory that ensures a declining path for central government debt. For 2024-25, the revised estimate for total receipts (excluding borrowings) stands at Rs 31.47 lakh crore, with net tax receipts at Rs 25.57 lakh crore. The revised estimate for total expenditure is Rs 47.16 lakh crore, including a capital expenditure of Rs 10.18 lakh crore. The fiscal deficit for the year is now pegged at 4.8% of GDP," said FM Sitharaman.

"The fiscal deficit is projected at 4.4% of GDP," she added.

More rare disease and chronic disease medicines will be added to the list of 36 life-saving medicines that are fully exempt from basic customs duties.

1. Removal of 7 tariff rates.

2. Exemption of Social Welfare Surcharge (SWS).

"The government will ensure speedy approvals for company mergers and the scope of such norms will be expanded,” said FM Nirmala Sitharaman.

“We will develop modern, people-friendly, trust-based regulatory framework,” added FM Sitharaman.

"The exemption on basic customs duty for shipbuilding and equipment manufacturing will be extended for an additional 10 years," said FM Sitharaman.

"The basic customs duty on frozen products will be reduced from 30% to 5%, while the BCD on shrimp and fish feed will be lowered from 15% to 5%," said FM Sitharaman.

FM Nirmala Sitharaman said that the government will announce new provisions for imports and exports.

“New Income tax Bill will be clear and direct in text and close to a half of the current bill. It will ensure simplicity and ease of understanding for both taxpayers and tax administrators. Its straightforward text aims to eliminate confusion, making it more accessible and user-friendly for all stakeholders involved. The reforms are not the destination but means to good governance for our people and economy,” she said.

1. Income tax reforms to ease the middle class burden.

2. Simplified TDS procedures.

3. Reduced compliance burden.

4. Boosting employment and investment.

"The government extends time limit of filing updated income tax return from any assessment year from the current limit to 2 years," announces FM Sitharaman.

"The government has increased the TDS threshold from Rs 50,000 to Rs 1 lakh for senior citizens," said FM Sitharaman.

FM Sitharaman stated that the government has extended the period of incorporation to five years, i.e., till 2030 for Indian start-ups.

"The government, under the leadership of the Prime Minister, has always recognised the efforts of the middle class," said FM Nirmala Sitharaman.

"No income tax will be levied on earnings up to Rs 12 lakh," she added.

2005: Rs 1 lakh

2012: Rs 2 lakhs

2014: Rs 2.5 lakhs

2019: Rs 5 lakhs

2023: Rs 7 lakhs

2025: Rs 12 lakhs

As India continues to position itself as a global leader in technology and innovation, the 2025 budget allocates substantial resources towards improving research capabilities. The announcement of 10,000 new fellowships is expected to not only bolster academic research but also contribute to national priorities in emerging fields such as artificial intelligence (AI), machine learning (ML), and renewable energy technologies. This initiative aligns with the National Education Policy's goal of increasing enrollment in higher education and improving research outputs across disciplines. Read more here

Union Minister of Finance Nirmala Sitharaman on Saturday proposed amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act in the Union Budget 2025.

She further announced that a nuclear energy mission for research and development of small modular reactors with an outlay of Rs 20,000 crore will be set up. "At least five indigenously developed small modular reactors will be operationalized by 2033," the FM stated. Read more here

“Global skilling partnerships will enable India to become a key player in global manufacturing. Infrastructure in IITs established after 2015 will be expanded, creating space for an additional 6,500 students across five IITs. Additionally, a Centre of Excellence for Artificial Intelligence in education will be set up with an allocation of ₹500 crore,” said Nirmala Sitharaman. Read more here

Income Tax Tweaks: Slab rates are being changed across the board to benefit tax payers.

0-4 lakh rupees – Nil

4-8 lakh rupees – 5%

8-12 lakh rupees – 10%

12-16 lakh rupees – 15%

16-20 lakh rupees – 20%

20-24 lakh rupees – 25%

Above 24 lakh rupees – 30%

‘Nil tax’ slab up to Rs 12 lakh (Rs 12.75 lakh for salaried tax payers with standard deduction of Rs 75,000).

Finance Minister Nirmala Sitharaman has pegged the fiscal deficit for 2025-26 at an impressive 4.4 per cent of the GDP. While presenting the Union Budget for the year, she revised the fiscal deficit target for the current fiscal year to 4.8% from 4.9%.

The Union Ministry of Finance has been aggressively following the fiscal consolidation path after the fiscal deficit shot up to 9.2% as a share of GDP in 2020-21 due to the Covid-19 pandemic. Read more here

"For 5 lakh first-time entrepreneurs, including women, Scheduled Castes and Scheduled Tribes, a new scheme, to be launched, to provide term loans up to Rs 2 crore during the next 5 years," FM Sitharaman announced.

"This year’s Union Budget takes a balanced approach, with a fiscal deficit estimate of 4.4% for FY26 signaling prudence. However, its true impact will depend on the revival of the public capex cycle and potential income tax reforms. The extension of the asset monetisation scheme until 2030 underscores a clear intent to unlock value from public assets, while the INR 1.5 trillion, 50-year funding support for states is a critical step toward ensuring sustained development. A significant highlight is the big boost for salaried taxpayers, with new tax slabs potentially allowing zero tax liability on incomes up to INR 12 lakh after standard deductions. Additionally, the expansion of the UDAAN scheme is a welcome move, strengthening regional air connectivity and fostering economic growth in underserved areas," said Avinash G Singh, Head - Investment Research and Analytics, Aranca.

"The Union Budget 2025-26 is a bold manifesto of India’s aspiration to solidify its position as a global economic powerhouse. With a strong emphasis on strategic investments in manufacturing, education, skilling, and inclusion, the budget lays the foundation for a future-ready workforce and sustainable economic growth, aligning with the vision of Amrit Kaal. A major highlight is the Make in India Manufacturing Mission, which will provide comprehensive policy support for small, medium, and large industries, particularly focusing on high-growth sectors like solar PV cells, electrolysers, and grid-scale batteries. This move will not only strengthen domestic production but also reduce import dependency, boost exports, and create thousands of jobs across different industry sizes," said Sumit Kumar, Chief Strategy Officer at TeamLease Degree Apprenticeship.

- Focus Product Scheme for Footwear & Leather Sectors: scheme is expected to facilitate employment for 22 lakh persons, generate turnover of Rs 4 lakh crore and exports of over Rs 1.1 lakh crore.

- Measures for the Toy Sector: To focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys to represent the 'Made in India' brand.

- Support for Food Processing: Establishment of a National Institute of Food Technology in Bihar, enhanced income for the farmers and skilling, entrepreneurship and employment opportunities for the youth.

- Ease and cost of doing business;

- Future ready workforce for indemand jobs;

- A vibrant and dynamic MSME sector;

- Availability of technology;

- Quality products;

- Clean tech manufacturing for climate-friendly development.

- Export Promotion Mission: With sectoral and ministerial targets to facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets.

- BharatTradeNet: A digital public infrastructure, ‘BharatTradeNet’ (BTN) for international trade will be set-up as a unified platform for trade documentation and financing solutions. Support for integration with Global Supply Chains.

- National Framework for GCC: As guidance to states for promoting Global Capability Centres in emerging tier 2 cities.

- Warehousing facility for air cargo: To facilitate upgradation of infrastructure and warehousing for air cargo including high value perishable horticulture produce.

Finance Minister Nirmala Sitharaman presented her 8th union Budget 2025 today (February 1). Here's what all she announced about the start-up sector:

1. A Fresh Rs 10,000 Crore Fund Of Funds Scheme

2. Govt to Explore Deep Tech Fund of Funds

3. Rs 500 crore Allocation to Three AI Centres of Excellence

4. Proposal to Increase Period of Incorporation

5. Scheme Proposed for First Time Women Entrepreneurs

Check out full list here

"The budget for the financial year 2025-26 aims to accelerate growth by providing a fillip to investment (capex up 10% to Rs 11.2 lakh crore) and a significant increase in the spending power of middle class, while maintaining on the path of fiscal consolidation. The budget manages to deliver on consumption, investment and social welfare without compromising on fiscal prudence. The fiscal deficit to GDP for FY26 is budgeted at 4.4% of GDP, ensuring a downward trend in debt to GDP levels. Overall, the budget places India in a strong position and shall play an important role in towards achieving the objective of Viksit Bharat by 2047," said Ashishkumar Chauhan, MD & CEO, NSE India.

“The Union Budget 2025 reflects a strong commitment to strengthening India's agricultural ecosystem, with a clear focus on enhancing productivity, promoting crop diversification, and improving post-harvest infrastructure. The focus on tax reliefs and measures aimed at increasing disposable incomes, especially for the middle class; is a positive move that will strengthen purchasing power and drive demand for quality food products," said Angshu Mallick, MD & CEO - Adani Wilmar.

"The budget delivers on the expectations of Triveni sangam of reduction in fiscal deficit, support to urban consumption through tax cuts and increase in capex through center, state and PSUs allocation," Nilesh Shah, MD - Kotak Mahindra AMC.

"The Union Budget for 2025-26 largely played to our expectations, particularly with the much-needed income tax relief for the middle class, which will drive consumption and economic growth. No changes were made to Securities Transaction Tax or capital gains tax, as anticipated. Sectorally, this budget is particularly positive for consumer and consumption-driven stocks, which have underperformed recently but now stand to benefit from a demand revival. Financials also present a strong opportunity, acting as a key proxy for economic growth. With the recent correction in both sectors, they offer significant value for investors," said Pranav Haridasan, MD and CEO, Axis Securities.

Union Budget, Markets Today: A big cheer for consumption stocks came-in as FM Nirmala Sitharaman proposed new personal income tax slabs in the Union Budget. Nifty FMCG, which has remained in the red territory for the best part of last year, skyrocketed by over 2,000 points or nearly 3% during the budget day. Read more here

Capex sees a meagre increase from Rs 11.1 lakh crore in FY25 to Rs 11.21 lakh crore for FY26.

"The Union Budget 2025 is clearly focused on stimulating consumer demand to accelerate growth while ensuring fiscal stability. With economic expansion slowing over the past two quarters, the newly announced measures aim to reignite momentum," said Shripal Shah, MD & CEO, Kotak Securities.

“The Union Budget 2025 outlines a strategic approach to sustainable economic growth, with a focus on infrastructure development, fiscal consolidation, and innovation. The fiscal deficit target of 4.8% for FY25, combined with Rs 1.5 lakh crore in interest-free loans for states, supports regional development and public-private partnerships. The budget also emphasises technology and innovation, with initiatives like the deep-tech fund and AI-focused education. Rural development is prioritised through measures like the Makhana Board in Bihar and the National Institute of Food Technology. Overall, Budget 2025 effectively balances fiscal prudence with long-term growth, positioning India for a competitive global economy," said Ashwani Dhanawat – ED and Chief Investment Officer, Shriram General Insurance.

“We commend Finance Minister Nirmala Sitharaman for presenting a visionary Budget 2025 that prioritises infrastructure development and urban expansion, particularly in Tier 2 and Tier 3 cities. The Udaan Yojana will be a game-changer, enhancing connectivity and unlocking the economic potential of emerging regions. Additionally, the national framework for Global Capability Centers in Tier 2 cities will strengthen talent availability and industry collaboration, fostering a robust investment climate," said Yateesh Wahaal, Director, M3M India.

"A budget is often like an iceberg. What we end up focusing on mainly is tax proposal which is just 10-15% of the story. However, what could be truly game changer is hidden beneath. In this budget, announcements around exports mission as well as a deregulation task force are very interesting. If the deregulation task force does manage to push through some radical reforms in its one year time frame, we could finally unleash investments and exports that we badly need for growth and jobs," said Piyush Doshi, Operating Partner, Foundation for Economic Development.

Several New-Age start-ups like Zomato, Swiggy, NYKAA and Ola Electric saw a surge in their stock prices post Finance Minister Nirmala Sitharaman’s Budget presentation. These start-ups, serving primarily the middle class demographic of India have seen this surge after the finance minister revised the income tax slabs and announced a new fund of fund scheme with a fresh allocation of ₹10,000 crore. Read more here

"The budget presents a well-balanced approach, exceeding expectations by prioritizing both economic growth and fiscal discipline. Growth is fostered through direct tax reductions to stimulate middle-class consumption, alongside increased government investments in key sectors such as agriculture to strengthen rural markets. Additionally, MSME credit guarantees and customs duty reductions aim to accelerate manufacturing expansion. Simultaneously, fiscal prudence is maintained by curbing revenue expenditure, reducing subsidies, and limiting borrowing, ensuring a stable economic framework," said Vinod Nair, Head of Research, Geojit Financial Services

"With China aggressively expanding its AI capabilities and the U.S. maintaining its dominance, India cannot afford to lag behind. Deep tech is no longer an option; it is the need of the hour. The government's commitment—allocating ₹20,000 crore for private-sector-driven R&D and proposing a Deeptech Fund—signals a crucial shift toward fostering homegrown innovation. With alternative investment funds already receiving commitments of over ₹91,000 crore and an additional ₹10,000 crore Fund of Funds on the way, we have a unique opportunity to build world-class startups in AI, quantum computing, and advanced manufacturing," said Jeenendra Bhandari, Chairman of JITO Incubation and Innovation Foundation (JIIF).

The Modi government's Budget announced a Prime Minister Dhan Dhaanya Krishi Yojana in partnership with states. The programme is proposed to cover 100 districts for enhanced agriculture productivity and crop diversification along with sustainable agriculture practices; and help 1.7 crore farmers. Read more here

Despite facing a slowdown in overall demand and industry-wide challenges, the Union Budget has delivered a substantial uplift to India's automotive sector. The Nifty Auto Index surged nearly 2% following the announcement of Budget 2025 by Finance Minister Nirmala Sitharaman.

Domestic automobile giants including Maruti Suzuki surged nearly 6%, TVS Motor jumped 5%, Bajaj Auto 2.7%, Exide Industries 2.43%, Hero MotoCorp 2.4% and Mahindra and Mahindra jumped 2.11%. Read more here

"The Union Budget 2025 is a visionary and inclusive blueprint for India's economic ascent, setting the stage for Viksit Bharat, ready to lead in the global arena. The government's commitment to reducing the fiscal deficit to 4.4% while laying down robust economic foundations for growth of the economy is truly commendable. The emphasis on skilling initiatives, particularly through the establishment of 50,000 Atal Tinkering Labs and the Centre of Excellence in Artificial Intelligence, will empower our youth with the skills needed to excel in a digital economy," said Yezdi Nagporewalla, CEO, KPMG.

Prime Modi Narendra Modi started addressing media on People's Budget. "This budget is a force multiplier. This budget will increase savings, investment, consumption and growth rapidly. I congratulate Finance Minister Nirmala Sitharaman and her entire team for this Janta Janardan's, People's budget."

"Budget 2025 will increase investments across sectors, consumption, and growth," said PM Modi

PM Modi said that the Budget is designed to give a solid boost to India’s "aam aadmi," focusing on enhancing financial security and promoting greater economic participation.

"Today is an important milestone in India's development journey. This is the budget of aspirations of 140 crore Indians. This is a budget that fulfils the dreams of every Indian. We have opened many sectors for the youth. The common citizen is going to drive the mission of Viksit Bharat," said PM Modi.

"The Middle Class gets a significant tax relief after a decade to boost consumption and eventually revive demand is the Brahmastra FM has fired. Kudos to her for doing so while remaining fiscally responsible by targeting a fiscal deficit of 4.4%. A special focus has been on human-intensive sectors that will generate employment. FDI limit to 100% in Insurance and special impetus to the Renewables, including energy storage systems, are clear positives. It would have helped if the EV charging infrastructure could have been given an industry status. Maintaining Capex levels while lowering taxation is huge but needs more details. With all these moves, the government remains laser-focused on Viksit Bharat by 2047," said GP Hinduja, Chairman, Hinduja Group.

"Increasing the FDI limit for insurance and pension reforms will deepen India’s financial markets and attract long-term investments. The budget’s theme of ‘Viksit Bharat’ is well reflected in its focus on economic resilience, financial empowerment, and sustainable development—ensuring that India remains on a strong path to global competitiveness and long-term prosperity," said Anshul Arzare, MD & CEO, Yes Securities.

"When startups are included in the central government’s annual budget planning, it is a moment to celebrate. We commend the Finance Minister for recognising securities held by AIFs as Capital Assets—a decision that strengthens the case for CAT I & II by ensuring that gains from securities are treated as capital gains and that GST on security sales remains outside the framework. Additionally, the launch of the new ₹10,000 crore round under the Fund of Funds for Startups (FFS) scheme reaffirms the government’s dedication to fostering innovation and entrepreneurship. This renewed fund which aligns with the Startup India Action Plan and initiatives like the Startup Mahakumbh has played a pivotal role in driving India's startup boom since its inception. We believe that increased financial support from the government, alongside efforts to reduce capital constraints and collaboration with industry will further accelerate the growth of Indian startups," said Archana Jahagirdar, Founder & Managing Partner, Rukam Capital.

"We will get to know about liquidity work when Reserve Bank's monetary policy will come. But to increase the liquidity of farmers, it has been increased in KCC from three lakhs to five lakhs. Provisions have been made so that MSMEs conveniently get money. Its (MSMEs) limit has also been increased so that they get encouragement to grow in future. Along with this, provisions have also been made for startups, innovations and new technology. So liquidity will naturally increase, and loan facilities for the poor in different areas...," said Piyush Goyal.

"The government’s plan to establish a dedicated ₹20,000 crore Fund of Funds for DeepTech startups, alongside 10,000 research fellowships at IITs and IISc over the next five years, is a decisive step toward strengthening India’s tech ecosystem. DeepTech currently accounts for 12-15% of Indian startups, with AI, semiconductors, and quantum computing leading the way. Expanding the Sidbi Fund of Funds by ₹10,000 crore will provide much-needed capital to scale these innovations," said Krishna Vij, VP, TeamLease Digital

Finance Minister Nirmala Sitharaman, in her eighth consecutive Budget announcement, emphasised boosting infrastructure development. She said that each infrastructure-related ministry will draft a three-year pipeline of projects that can be implemented through Public-Private Partnership (PPP) mode. 

The move aligns with the Economic Survey 2024-25, which called for increased private sector participation in infrastructure development. Read more here

"The introduction of social security measures for gig workers is a key highlight, acknowledging their valuable contribution to the economy. It’s a much-needed upliftment and a step towards recognising gig workers' contribution in India’s economy and youth employment. As consumers increasingly look for better pricing, value, and selection, government’s focus on elevating the infrastructure in emerging cities like Kota and Nagpur is a great move," said Aadit Palicha, Co-Founder and CEO, Zepto.

"India is at the cusp of a healthy snacking revolution, and makhanas form a pivotal part of the same. As a driving force of healthy snacking with a range of makhanas and makhana-based snacks, we welcome the establishment of a Makhana Board in Bihar as a transformative step in India's healthy snacking revolution. This superfood from our motherland is now positioned to make its mark on the global health food landscape. The Board's formation will streamline the entire value chain - from production and processing to value addition and marketing of fox nuts. For farmers engaged in makhana cultivation, this initiative opens doors to skill development and institutional support, creating a win-win ecosystem for both agricultural communities and leading industry players like Farmley," Akash Sharma, co-founder, Farmley.

"Union Budget 2025 introduces significant measures to strengthen India’s startup ecosystem and deep-tech innovation. The ₹10,000 crore renewal to the Fund of Funds for AIFs is a major boost to early-stage startups. The initial commitment has already attracted ₹91,000 crore in investments, and the fresh infusion is expected to attract an additional ₹1 lakh to ₹1.5 lakh crore in capital. This is crucial for accelerating innovation and positioning India as a global hub for startups," Ankit Anand, Founding Partner at Riceberg Ventures, said.

"... This is the first time that a budget has given such a huge tax relief of Rs 1 lakh crore to the middle class... It will enable a boost in consumption, production, investment, and growth in the long term. It has been done in a fiscally responsible way and by considering the macroeconomic stability... The focus on nuclear energy and the opening of insurance will greatly benefit the country in the future...," said Former NITI Aayog CEO Amitabh Kant.

"The 2025 Union Budget outlines a comprehensive strategy for enhancing agricultural productivity and sustainability, aligning with the vision of Viksit Bharat. The Finance Minister’s initiatives, such as the PM Dhan Dhanya Krishi Yojana, which aims to benefit 1.7 crore farmers across 100 districts, are particularly noteworthy," said Simon Wiebusch, Country Divisional Head, Crop Science Division of Bayer in India, Bangladesh and Sri Lanka.

Finance Minister Nirmala Sitharaman, while addressing a press conference after presenting the Budget 2025, said that fiscal deficit for FY26 aligns to the glide path given in 2021.

Addressing a joint press conference post-budget, Finance Secretary Tuhin Kanta Pandey said the changes announced by FM Nirmala Sitharaman in income tax slab will benefit every tax payer at every level.

Finance Minister Nirmala Sitharaman compared the tax rates with Congress government's. "Someone earning Rs 8 Lakh pays Rs 1 lakh less tax today as compared to 2014 when it was the Congress government," she said. She added that the government hopes the money saved by people comes back into the economy. "We have put money back into people's hands," she said.

On being asked about the tax levied on capital gains, FM Nirmala Sitharaman said income is always calculated without capital gains.

“The Finance Minister’s announcement marks an important moment for India’s growing footwear industry—one that has the potential to redefine scale, efficiency, and global standing. A ₹4 trillion market opportunity, 2.2 million new jobs, and ₹1.1 trillion in exports is a signal that Indian footwear is ready to step onto the world stage with force truly taking in make in India for the world," said Chirag Taneja , Founder & CEO, GoKwik.

The Union Budget 2025 on Saturday proposed to fully exempt customs duty on lithium-ion battery scrap, lead, zinc, cobalt powder and12 more critical minerals. This move comes as a bid to boost manufacturing and job availability in the country.

Additionally, the government has proposed to add 35 capital goods for EV battery manufacturing in order to boost domestic manufacture of lithium-ion batteries for electric vehicles (EVs). Read more here

In the Union Budget 2025, Finance Minister Nirmala Sitharaman has announced budgetary support for an additional 6,500 more seats in the IITs (Indian Institute of Technology), the premier colleges of the country that millions of students compete to enter each year.

“Total number of students in 23 IITs has increased 100 % from 65,000 to 1.35 lakh in the past 10 years. Additional infrastructure will be created in the 5 IITs started after 2014 to facilitate education for 6,500 more students. Hostel and other infrastructure capacity at IIT Patna will also be expanded,” the Finance Minister said. Read more here

In a major boost to the AI ecosystem, Union Budget has allocated Rs 2,000 crore to the IndiaAI Mission. The Rs 2,000 crore allocation is nearly a fifth of the scheme’s Rs 10,370 crore outlay. Announced in March 2024, the mission aims to make India a global AI leader and democratize AI benefits.

The initial budget allocation for the IndiaAI Mission in the 2024-25 Union Budget was Rs 552 crore. However, it was later reduced and the revised estimate for the same was Rs 173 crore. Read more here

Equity benchmark indice Sensex and Nifty settled flat in a special trading session on Saturday as Investors found little to excite them in the Union Budget, as Finance Minister Nirmala Sitharaman did not announce significant measures for retail investors or the broader markets. Read more here

'Prudence' might have won over 'populism' in this year's budget as the Finance Minister maintained a fine balance between boosting consumption levels alongside keeping fiscal deficit in check. However, the 'modest' growth in capex outlay brought little to no cheer for investors.

This year's capex outlay, which stood at Rs 11.2 Lakh Crore, was only slightly higher than last year's budget figure of Rs 11.1 Lakh Crore. This pushed infrastructure stocks on a downward spiral. Despite benchmark indices, Sensex and Nifty, concluding the budget day on a flat note, Nifty infra plummeted by more than 1%. Read more here