B – Bihar 🤝

Bihar remained the flavour of the Budget speech for the second straight year, in a reflection of the political compulsions of the Modi 3.0 administration. Bihar was mentioned six times by Sitharaman, who did not name any other state during her over-hour-long speech. Proposals ranged from the quirky (setting up of a Makhana Board) to the substantial (greenfield airports, Western Koshi Canal Project, and a National Institute of Food Technology, Entrepreneurship and Management). Bihar goes to the polls later this year.

C – Consumption boost 🍞

Finally, a much-needed morale booster for the middle class. Who knew being glued to business news channels on a Saturday would pay off?

The finance minister gave taxpayers a big relief in Union Budget 2025-26 by making income up to ₹12 lakh tax-free from ₹7 lakh earlier.

Factoring in the standard deduction of ₹75,000 for the salaried class, income up to ₹12.75 lakh will be tax-free, which is expected to give a fillip to lagging urban consumption.

As a result of the tax proposals, the government will forgo revenue of about ₹1 trillion in direct taxes and ₹2,600 crore in indirect taxes, the FM added.

D – Deep tech 🤖

While not quite matching China’s DeepSeek and other pyrotechnics, India is slowly but surely bracing for action in the arena of new-age technologies. The Budget highlighted that a Deep Tech Fund of Funds will be explored to catalyze the next generation of startups. It also allocated ₹20,000 crore to implement the private sector driven Research, Development and Innovation initiative announced in the July Budget.

A Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of ₹500 crore.

E – EVs 🔋

The shadow of Nitin Gadkari seemed to loom large over the Budget, which pressed the pedal on green mobility and other Clean Tech manufacturing. As part of the National Manufacturing Mission, the Centre will aim to improve domestic value addition and build the ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid-scale batteries.

The Budget also fully exempted Basic Customs Duty (BCD) on cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. It also exempted BCD on 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing.

F – Fund of Funds for Startups 💸

North Block may be far away from the deal-making world of VCs, but its intent is clear: startups need regulatory and financial support.

Alternative Investment Funds (AIFs) for startups have received commitments of more than ₹91,000 crore. These are supported by the Fund of Funds set up with a government contribution of ₹10,000 crore. Now, a new Fund of Funds, with expanded scope and a fresh contribution of another ₹10,000 crore, will be set up.

In addition, to improve access to credit, the credit guarantee cover will be enhanced from ₹10 crore to ₹20 crore for startups, with the guarantee fee being moderated to 1% for loans in 27 focus sectors important for Atmanirbhar Bharat.

The government will also extend the period of incorporation by five years to make the benefit available to start-ups incorporated before 1.4.2030.

G – Gig Workers 🧑‍🔧

Acknowledging the contribution of gig workers of online platforms to the new-age services economy, Sitharaman said the government will arrange for their identity cards and registration on the e-Shram portal. They will also be provided healthcare under PM Jan Arogya Yojana. This measure is likely to assist nearly 1 crore gig workers. Zomato was the top performing stock in the Sensex pack, soaring 7%.

H – Heal in India 🧘‍♀️

Medical tourism and Heal in India will be promoted in partnership with the private sector along with capacity building and easier visa norms, the FM announced in Parliament. Outside, the Air Quality Index (AQI) in Delhi hovered at hazardous levels of around 300.

I – Insurance 🦺

The FDI limit for the insurance sector will be raised from 74% to 100%. This enhanced limit will be available to companies that invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified, the Budget added.

J – Jal Jeevan Mission 💧

The Jal Jeevan Mission, under which 150 million households representing 80 per cent of India’s rural population have been provided access to potable tap water, has been extended until 2028 with an enhanced total outlay. The mission’s focus will be on the quality of infrastructure and operation and maintenance of rural piped water supply schemes through “Janbhagidari”. Separate MoUs will be signed with states/UTs, to ensure sustainability and citizen-centric water service delivery.

K – Knowledge economy 🤓

Additional infrastructure will be created in the five IITs started after 2014 to facilitate education for 6,500 more students. The government will also add 10,000 seats in medical colleges and hospitals as part of the goal of adding 75,000 seats in the next five years.

Besides, the Centre will set up a National Digital Repository of Indian knowledge systems for knowledge sharing.

L – Labour-intensive sectors 👷

To enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of ₹4 lakh crore and exports of over ₹1.1 lakh crore.

Building on the National Action Plan for Toys, the government will implement a scheme to make India a global hub for toys. The scheme will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative,

and sustainable toys that will represent the ‘Made in India’ brand.

M – MSMEs 🧶

Recognizing MSMEs as one of the four engines of growth, the FM highlighted that currently, over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36% of domestic manufacturing, have come together to position India as a global manufacturing hub. MSMEs are also responsible for 45% of India’s exports.

To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the Budget has enhanced the investment and turnover limits for classification of all MSMEs to 2.5 and 2 times, respectively. The credit guarantee cover for micro and small enterprises will also be doubled to ₹10 crore, leading to additional credit of ₹1.5 lakh crore in the next 5 years.

N – Nuclear energy ☢️

Development of at least 100 GW of nuclear energy by 2047 is essential for our energy transition efforts, Sitharaman noted. For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up.

That apart, a Nuclear Energy Mission for research and development of Small Modular Reactors (SMR), with an outlay of ₹20,000 crore, will be set up. At least five indigenously developed SMRs will be operationalized by 2033.

O – Overseas trade 🚤

At a time when an over-torqued Trump is whiplashing the global trade order on a daily basis, New Delhi is pulling out all the stops to calm the nerves of the fretful domestic exporters.

Sitharaman said the government will set up an Export Promotion Mission, with sectoral and ministerial targets, driven jointly by the Ministries of Commerce, MSME, and Finance. It will facilitate easy access to export credit, cross-border factoring support, and support for MSMEs to tackle non-tariff measures in overseas markets.

‘BharatTradeNet’ (BTN), a digital public infrastructure for international trade, will be set up as a unified platform for trade documentation and financing solutions. This will complement the Unified Logistics Interface Platform. The BTN will be aligned with international practices.

P – Poets and paeans ✍

Continuing with the hallowed tradition of finance ministers sprinkling their speeches with literary references, Sitharaman quoted renowned Telugu poet and playwright Gurajada Appa Rao, “Desamante matti kaadoi, desamante manushuloi”; meaning: A country is not just its soil, a country is its people.

A couplet from the classic Tamil work Thirukkural also found a mention.

“Vaanokki vaalum ulakellaam mannavan koalnokki vaalung kuti.” Meaning: Just as living beings live expecting rains, Citizens live expecting good governance.

Q – Quality over quantity 👌

Refreshingly, the Budget document regularly emphasized the quality of outcomes rather than just focusing on aggregate numbers. Good quality school education and access to high-quality healthcare were listed among the objectives of ‘Viksit Bharat’. Similarly, initiatives such as the Mission for Cotton Productivity and National Action Plan for Toys underscored the importance of producing products of high quality.

R – Red tape 🏢

In tandem with the Economic Survey, deregulation and cutting red tape emerged as a conspicuous theme in Budget 2025-26.

The FM announced that the much-awaited new income-tax bill, to be introduced next week, will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.

The Budget also rationalized TDS/TCS rates for a range of transactions, doubled the time limit to four years for filing updated returns for any assessment year, and reduced the compliance burden for small charitable trusts/institutions by increasing their period of registration from five years to 10 years.

To streamline the process of transfer pricing and provide an alternative to yearly examination, the Budget proposed to introduce a scheme to determine the arm’s length price of an international transaction for a block period of three years, in line with global best practices.

With a view to reducing litigation and providing certainty in international taxation, the scope of safe harbour rules is being expanded.

S – Shipbuilding ahoy! 🚢

The sector was a prominent winner in this year’s Budget. The FM said the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages. This will also include Credit Notes for shipbreaking in Indian yards to promote the circular economy.

Large ships above a specified size will be included in the infrastructure harmonized master list. Shipbuilding Clusters will be facilitated to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.

T – Tourism 🌴

Incredible India for the win! The top 50 tourist destinations in the country will be developed in partnership with states through a challenge mode. Land for building key infrastructure will have to be provided by states.

Other measures include organizing intensive skill-development programmes for youth, including in Institutes of Hospitality Management; providing MUDRA loans for homestays; providing performance-linked incentives to states for effective destination management, including tourist amenities, cleanliness, and marketing efforts; and introducing streamlined e-visa facilities along with visa fee waivers for certain tourist groups.

U – UDAN 🛫

The Ude Desh ka Aam Naagrik (UDAN) scheme has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel. The scheme has connected 88 airports and operationalized 619 routes.

“Inspired by that success, a modified UDAN scheme will be launched to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years. The scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts,” the FM said.

V – View(s) from the Top 🌅

Prime Minister Narendra Modi lauded the Union Budget as a “force multiplier”.

“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,” the PM said.

“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,” Modi added.

In contrast, Congress leader Rahul Gandhi was at his alliterative best as he termed the Budget “a band-aid for bullet wounds”.

“Amid global uncertainty, solving our economic crisis demanded a paradigm shift. But this government is bankrupt of ideas,” he tweeted.

W – Warehousing 🚚

The government will facilitate upgradation of infrastructure and warehousing for air cargo, including high-value perishable horticulture produce. Cargo screening and customs protocols will be streamlined and made user-friendly, the FM announced.

X – X-factor 💅

The Centre will start a National Geospatial Mission to develop foundational geospatial infrastructure and data. Using PM Gati Shakti, this Mission will facilitate modernization of land records, urban planning, and design of infrastructure projects.

The Budget also said a second Gene Bank with 10 lakh crop germplasm lines will be set up for future food and nutritional security. This will provide conservation support to both the public and private sectors for genetic resources.

Y – Youth 🧒

A string of measures was announced for skilling youth and expanding employment opportunities, including a comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme, five National Centres of Excellence for skilling, and support for integration with global supply chains.

“Through this, there are huge opportunities related to Industry 4.0, which needs high skills and talent. Our youth have both,” the FM noted.

Z – Zen and the art of fiscal maintenance ☯

Sitharaman pegged the fiscal deficit target for 2025-26 at 4.4% of gross domestic product (GDP), down from 2024-25’s 4.8%. This marks the conclusion of a crucial post-pandemic fiscal consolidation period that began with Union Budget 2021-22, when the Centre committed to reducing the fiscal deficit to below 4.5% of GDP by FY26.

“In the July Budget, I had committed to staying the course for fiscal consolidation. Our endeavour will be to keep the fiscal deficit each year such that the Central Government debt remains on a declining path as a percentage of the GDP,” the FM said.

After reaching a high of 9.16% in 2020-21 due to pandemic-driven expenditure, the fiscal deficit has consistently declined as a percentage of GDP.

The revised capital expenditure (capex) estimate for FY25 stood at ₹10.18 trillion compared to the earlier target of ₹11.1 trillion. The cut is attributed to slower capital spending during the first half of the fiscal year. For FY26, Sitharaman raised the capex target to ₹11.2 trillion. The market, going by its sulky reaction, perhaps wanted more.