Key Highlights:
Personal Income Tax Reforms: The budget proposes substantial cuts in personal income tax rates to boost domestic demand. The tax exemption threshold has been raised from ₹700,000 to ₹1.28 million, with reduced rates for incomes above this threshold. This move is expected to enhance middle-class consumption, savings, and investment, despite an anticipated annual revenue loss of approximately ₹1 trillion.
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Agricultural Initiatives: A six-year program has been announced to increase the production of pulses and cotton, aiming to reduce import dependence. The program includes state agencies purchasing pulses at guaranteed prices to support farmers. Additionally, efforts will be made to boost cotton production through research and development initiatives.
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Fiscal Deficit and Borrowing: The government projects a reduction in the fiscal deficit to 4.4% of GDP in the 2025-26 fiscal year and plans to borrow ₹14.82 trillion to finance it.
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Support for Various Sectors: The budget includes measures benefiting the poor, youth, farmers, and women, such as a national mission to boost crop productivity and increased subsidized credit limits for farmers. There is also a focus on manufacturing and exports, with initiatives to enhance the ease of doing business and attract investment.
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These initiatives reflect the government's strategy to navigate global economic uncertainties by bolstering domestic demand and supporting key sectors.