Prime Minister Narendra Modi on Saturday (March 1, 2025) called for expeditious implementation of the budgetary proposals for agriculture and rural development, urging stakeholders to focus on “action” instead of deliberating on a new budget.

Addressing a post-budget webinar on ‘Agriculture and rural prosperity’, the Prime Minister emphasised that the budget reflects the government’s new expansion of the vision for a “Viksit Bharat” with a consistent policy approach in its third term.

Also read |Agriculture is fiscally neglected in the Budget 

“It is important to implement this year’s budget in a speedy manner. The budget has been formed and our entire focus should be on the action,” Mr. Modi said, adding that the stakeholders should identify “obstacles and shortcomings” in budget implementation.

Mr. Modi said before the budget, inputs and suggestions from all stakeholders helped in framing it. “Now this budget needs to be implemented more effectively on the ground, and for a better outcome, the [stakeholders’] role is even more crucial.

Agriculture is considered as the first engine of growth and the government is moving ahead with the twin target of achieving agricultural growth and rural prosperity, he said.

Mr. Modi said the government is committed towards the goal of “Viksit Bharat” and the effort is to ensure no farmer is left behind and to advance every farmer.

“We need to fully explore the country’s agricultural potential and achieve more targets.” The Prime Minister highlighted record achievements in the agriculture sector, noting that foodgrain production has increased from 265 million tonnes a decade ago to over 330 million tonnes currently. Similarly, horticulture production has grown to exceed 350 million tonnes.

Mr. Modi specifically mentioned the PM Dhan Dhanya Krishi Yojana, describing it as “a very important scheme” for him. The initiative will focus on 100 districts with low crop yields, following the successful model of aspirational districts.

“We have announced the setting up of a Makhana Board in Bihar. I urge all stakeholders to explore and promote diverse nutritional foods across the country and in the global market,” he said.

The Prime Minister highlighted ICAR’s contributions, stating that between 2014 and 2024, more than 2,900 new varieties of foodgrains, pulses, and sugarcane and other crops were developed using modern tools and cutting-edge technology in the breeding programme.

“You have to ensure these new varieties are available at affordable rates to farmers. We also need to ensure farmers’ produce is not affected by weather aberrations,” Mr. Modi said.

He mentioned that a central mission on high-yielding seeds has been announced in the budget. “I especially urge the private sector to become part of the seed chain to ensure high-yielding seeds reach small farmers.” On pulses production, the Prime Minister acknowledged improvements but pointed out that India still imports 20% of its domestic consumption needs.

While the country has achieved self-sufficiency in chickpeas (chana) and moong dal, Modi stressed increasing production of tur, urad and masoor through high-yielding varieties and hybrid seeds.

The Prime Minister noted that approximately ₹3.75 lakh crore has been transferred directly to 11 crore farmers under the PM-KISAN scheme since its launch six years ago. The annual financial assistance of ₹6,000 is strengthening the rural economy.

He mentioned that a farmer-centric digital infrastructure has been created to ensure the benefits of this scheme reach farmers across the country, eliminating any scope for intermediaries or leakages.

Referring to the fisheries sector, Modi said, “In 2019, we had launched PM Matsya Sampada Yojana. It was an important step towards strengthening the value chain, creating infrastructure and modernisation. It helped improve production, productivity and post-harvest management in the fishery sector.” “The sector has seen higher investment and results are before us: fish production and export have increased two-fold. We are going to design a framework for sustainable harnessing of fisheries from the Indian Exclusive Economic Zone and High Seas,” he added.

Mr. Modi urged stakeholders to explore ideas on ease of doing business in the fisheries sector while protecting the interests of traditional fishermen.

“Our government is committed to enriching the rural economy”, the Prime Minister said, adding that under the PM Awas Yojana-Gramin, crores of poor people are being provided with homes, and the Swamitva Yojana has given property owners ‘Record of Rights’.

He noted that the Pradhan Mantri Gram Sadak Yojana has benefited small farmers and businesses and also highlighted the progress in empowering self-help group. “We kept the target of 3 crore lakhpathi didis. With our efforts, more than 1.25 crore women have become lakhpati didis.” The announcements in this budget for rural prosperity and development programs have created numerous new employment opportunities. Investments in skilling and technology are generating new opportunities, he added.

Published – March 01, 2025 04:23 pm IST

Union Finance Minister Nirmala Sitharaman, Reserve Bank of India Governor Sanjay Malhotra and Directors during the 613th Meeting of Central Board of Directors (CBD) of the RBI in New Delhi on February 8, 2025.
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Saturday (February 8, 2025) said she is likely to introduce the new income tax bill, which will replace the six-decade-old I-T Act, in the Lok Sabha in the coming week.

After introduction in the Upper House, the bill will be sent to a parliamentary standing committee for scrutiny.

Also read: Union Budget 2025 highlights

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the bill on Friday (February 7, 2025).

“Yesterday, the Cabinet cleared the New Income Tax proposal, I hope to have it introduced in the Lok Sabha in the coming week. Post that it will go to a committee,” Ms. Sitharaman said a media briefing after addressing the post-Budget customary meeting with the central board of directors of the Reserve Bank of India (RBI).

The bill will again go to the Cabinet after the parliamentary committee gives its recommendations on it. After Cabinet approval, it will again be introduced in Parliament.

“I still have three critical stages to pass through,” Ms. Sitharaman said to the query regarding rollout of the new income tax law.

Ms. Sitharaman had first announced a comprehensive review of the Income-Tax Act, 1961 in the July 2024 Budget.

The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers.

Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

To another question, the Finance Minister said the last week’s Budget announcement on customs duty rationalisation is a work that has been on since the last two years.

“So we had rationalised some even two years ago. We also set certain norms saying evergreening is not going to happen on anti-dumping duties, which had played a big role in giving some kind of a protection for India’s own manufacturing capabilities,” she said.

Ms. Sitharaman further said with every such expiry date getting closer, the government will review it thoroughly, and only in exceptional cases duties will be extended, but most often they should be concluded so that the protection does not become a perpetual protection.

“So, this is an ongoing process. We want to make India a lot more investor-friendly, trade friendly, and at the same time, balance it with Aatmanibhar Bharat where we need to have production, particularly through the MSMEs. We will provide the tariff protection as required by the industry,” the Finance Minister, who presented her eighth straight Budget on February 1, said.

In her Budget speech, Ms. Sitharaman had announced rationalisation of customs tariff structure for industrial goods.

As part of comprehensive review of customs rate structure announced in July 2024 Budget, on February 1, 2025 she proposed to remove seven tariff rates.

This was over and above the seven tariff rates removed in the 2023-24 Budget. There will be now only eight remaining tariff rates, including ‘zero’ rate.

In the latest budget speech, the Indian Finance Minister reiterated an earlier-articulated goal for Nuclear Energy capacity—to reach 100 GW by 2047. Where are we now? At 8 GW. Does the goal sound more than just a bit ambitious?

In this episode, we will learn a tiny bit of nuclear science as well as about the race against time we have set ourselves up with.

Script & Presentation: K. Bharat Kumar

Videography: Shiva Raj S

Editing: Shibu Narayan

A worker cleans the floor of a showroom during a presentation of the Union Budget 2025-26, in Mumbai, on February 1.
| Photo Credit: PTI

It would not be an exaggeration to say that this is the biggest tax cut that the middle class has ever got in any Union Budget. To be sure, the tax-paying middle class in India is nowhere near “middle” of the income spectrum and, hence, those who would directly benefit from these cuts are a minuscule minority (between 2-3% of the population). Nevertheless, it is indeed a significant cut in tax rates for every class of taxpayer. For those earning between ₹7-₹12 lakh a year, it is a complete tax rebate, which was earlier applicable to only those below ₹7 lakh. For others earning more than ₹12 lakh, the exemption limit has increased from ₹3 to ₹4 lakh. The rest of the tax slabs have also changed favourably along with a cut in the marginal tax rates. So, everyone earning more than ₹7 lakh stands to gain in taxes payable. No wonder this step, as noted by the Finance Minister, will lead to a fall in tax revenue to the tune of ₹1 lakh crore. This is 8% of the direct income tax collection of ₹12.57 lakh crore in the current year.

Also Read: Union Budget 2025: Tax break will give a fillip to slowing economy, says Centre

Budgets are an exercise in both a redistribution of income (through differential variation in tax rates) and affecting the level of economic activity through its expenditure decisions.

Since the tax rebate has implications for both, and a lot of the plans of the 2025 Budget ride on it, this piece primarily focuses on this unprecedented fall in income tax rates.

The logic behind the tax rebates

Despite the fall of 8% in the effective tax rate as a result of this policy, the Budget has estimated direct tax collection to go up by 14%. A simple arithmetic calculation would tell us that this requires the rise of income to be around 24% (see Box 1).

With a projected growth of 10.1% in nominal GDP, this means more than double the growth in taxpayers’ income. This may or may not happen. Let’s discuss each of the two scenarios.

First, the optimistic scenario. In the backdrop of higher tax exemption limits (from ₹7 to ₹12 lakh for zero tax and ₹3 to ₹4 lakh for those earning more than 12 lakh), this would require either a significant rise in the number of people earning more than ₹12 lakh and/or a significant rise in the income of the current taxpayers, that is, what economists would call higher tax buoyancy. If it’s the latter, this means further concentration of income in the hands of the upper classes. This may just further the K-shaped growth that the country has witnessed since the pandemic. And if it’s the former, this may reflect some upward mobility at the upper end of the income spectrum.

Worst-case scenario

Now, the pessimistic scenario. If the tax buoyancy does not quite work out, the implication of it is going to fall on the poor and disadvantaged of this country.

In a world where expenditure by the government is directly linked to tax revenue, any shortfall on the tax side will show up on the expenditure side as well. With the Fiscal Responsibility Budgetary Management Act (FRBM) in place, governments are bound by how much they can spend over and above their tax revenue and that deficit limit is set in the Budget every year (see Box 2).

The state effectively loses control over how much it can spend, and the fiscal policy becomes pro-cyclical (it increases or decreases with GDP) instead of countercyclical as it is supposed to be. The idea of fiscal policy arose in economics from the assumption that it could be expanded in conditions of slowdown and contracted during booms. Adherence to FRBM does the exact opposite.

This government’s track record on strictly adhering to its deficit targets is quite telling. In a year, when the government was worried about a four-year low in economic growth, it has dared to revise its deficit target down from 5% as announced in the 2024 Budget to 4.8%. No wonder this fall in deficit has been managed through an almost across the board cut in expenditures compared to the figures announced in Budget 2024 (Chart 1 shows categories of expenses where there has been a fall). The left column in the chart shows the difference between what the Finance Minister announced last year and what the revised expenses actually were. As is evident, there has been a fall of ₹1 lakh crore in total expenditure. So, the government fell way short of its 2024 promises in terms of its commitments. The promises made in Budget 2025 (the right column of chart 1) are a significant jump from the revised figures of the last Budget. These promises can only be fulfilled if revenue plans turn out to be correct otherwise there would have to be similar (or more) cuts in the actual expenses made in 2025-26.

That the government is extremely serious about managing its deficit becomes clearer if one looks at some of the schemes that have been associated with the Prime Minister. Chart 2 presents the difference between the Budget and Revised Estimates for some of these important schemes. It can be seen that the cut has been across most of the flagship schemes. So, when this government promises fiscal consolidation, it really means it, no matter what the underlying economic circumstances are. The only exception to this rule is perhaps the pandemic where fiscal consolidation was paused for a brief while.

Fiscal consolidation or contraction?

What is additionally worrying on this count is that the Finance Minister has announced an even lower deficit target this Budget, down from 4.8% (RE 2024) to 4.4% (BE 2025). It’s not fiscal consolidation alone, it’s fiscal contraction. If a 4.8% couldn’t deliver a turnaround in growth, a 4.4% is less likely to. Even if you were a fiscal hawk, now is not the time to be one. With growth slowing down, the economy requires exogenous stimuli (exogenous to the current level of activity), which propels the economy. Such an exogenous stimulus usually comes from exports, corporate investment or government expenditure. With the last lever gone (as expenditure becomes pro-cyclical), the government is effectively banking on exports and corporate investment to bring about a turnaround in growth. If we go by the 2025 Economic Survey, policymakers are not very optimistic about global demand, so it is clear they are expecting the corporate sector to take up the slack.

If corporate investment has not picked up despite tax cuts or aggressive capex spending over the last four years, there has to be the expectation that the income tax cuts would increase consumption demand, which would require an increase in investment, thereby setting a virtuous cycle of growth begetting growth. Yet again, we are back to income tax cuts. Does putting all your eggs in one basket make sense when things are not going your way? And yet, this is what the government seems to have done. It’s a one way gamble.

Rohit Azad teaches economics at Jawaharlal Nehru University, New Delhi. Indranil Chowdhury teaches economics at PGDAV college, DU

File picture of Union Minister Ashwini Vaishnaw.
| Photo Credit: The Hindu

Union Railway Minister Ashwini Vaishnaw on Monday (February 3, 2025) said funds to railway projects in West Bengal have been increased three times since Mamata Banerjee was in charge of the Ministry of Railways.

“The allocation which was in Mamata Didi’s (Banerjee) time has been increased three times by Modi ji in West Bengal,” Mr. Vaishnaw said, during a web conference on the Railway Budget 2025.

The Minister informed that an allocation of ₹13,955 crores has been provided for West Bengal under Railway Budget 2025. The average annual allocation to West Bengal from 2009 to 2014 was ₹4,380 crore.

Also Read | T.N. allotted ₹6,626 crore to execute railway projects: Vaishnaw

Highlighting that the current investment in West Bengal for Railways in the State stands at ₹68,000 crores, the Minister requested the West Bengal government to address land acquisition and law and order issues so that benefits of these investments and projects reach citizens at the earliest.

“For the development of Railways land acquisition is important and I will request the Hon’ble Chief Minister to help us in land acquisition,” the Minister said. The Minister also informed that 101 stations in West Bengal are being modernised under the Amrit Bharat Station Scheme and around 1290km of tracks were added in the state in the last 10 years.

During the interaction Mr. Vaishnaw said that there are nine Vande Bharat trains operating in West Bengal which is a significant number. The Minister informed that in West Bengal, 3,337km of tracks would be covered with the Kavach system to enhance railway safety.

Also Read | Union Budget 2025: Railways allocation remains unchanged at ₹2.65 lakh crore, budget for customer amenities, investment in PSUs slashed

The remarks by the Minister of Railways assumes significance amid complaints from the Trinamool Congress leadership that the allocation to Railway projects in West Bengal has been reduced since the Ministry of Railways was headed by leaders from Trinamool Congress.

Trinamool Congress chairperson Mamata Banerjee was Railways Minister for two terms — first during the NDA government in 2000 and then in UPA government from 2009 to 2011. After Ms. Banerjee, Trinamool leaders Mukul Roy and Dinesh Trivedi have also held the portfolio.

There are several key Railway projects in West Bengal including the East West Metro Project connecting Howrah Maidan to Sector V in Salt Lake through an under river tunnel whose completion has been delayed in the State. The project, however is operational along certain routes.

Union Finance Secretary Tuhin Kanta Pandey.
| Photo Credit: The Hindu

The Centre’s decision to significantly slash the income tax payer’s burden was aimed at addressing some “angst” that the government had noticed in recent months as well as to give a fillip to the economy’s weakening growth impulses with a broad-based boost to demand, savings, and investments, Finance Secretary Tuhin Kanta Pandey said on Sunday (February 2, 2025).

While the government will forego ₹1 lakh crore of revenue through the move to make annual incomes up to ₹12 lakh tax-free and rejig the tax slabs and rates across the board, Mr. Pandey told The Hindu that in aggregate terms, this will spur the economy in a manner which “probably can’t even be fathomed”.

Full Budget coverage

“The fact is that there was also angst, which I think the government noticed. The second is also the economic reason [slowdown]. This is a good and a new deal,” the Secretary said.

‘Trust people’s wisdom’

“Normally, we say an investment multiplier is more than the consumption multiplier… But the state of economy that we have today, it requires all kinds of engines to be fired. Therefore, agnostic of that, I think we should really be trusting the people’s wisdom, whatever they want to do. It will come back and the economy will get a boost,” he said, adding that “Lakshmi baantne se badhti hai (distributing wealth also increases wealth)“.

“If the money comes to the government, it will be put in a certain way. If the money goes back to people, the money is distributed in a more equitable way and I’ll explain why. If I give the money to you, you have three choices. You can consume, as per your choice — be it on travel, dining, services, or consumer durables — which will be much more broad-based and not just be in steel and cement,” he pointed out.

Save, spend, invest

If people choose to save instead of consuming, that would also help, as India’s savings rate needs to go up and bank deposits need to grow to support credit flows to critical segments like micro, small and medium enterprises (MSMEs), the Finance Secretary said.

“Third, you may choose to invest directly. Have we forgotten about household investments? Millions of houses are being made or rebuilt by people on their own across small towns. They raise the money, order things on their own, get a contractor to build or rebuild their own houses. That’s how it used to be and still is in many places,” Mr. Pandey underlined.

Asked if there was an assessment of how much this tax stimulus could lift growth, the Secretary said: “What kind of multiplier will operate will depend upon the mix… It could be consumption plus investment in some cases. In either case, in the current situation that we are here, whatever you would do, it helps.” Consumption will spur demand and help private investments, savings will boost bank deposits, and so on, he explained.

“So it is a relief and it is also a policy choice that the government has exercised in order to see that this extra disposable income will come back to the economy and lift the spirits. This would enhance the weakening growth engines of demand and address the slowdown concern too,” the Finance Secretary said.

RBI rate cut possible

Asked whether an interest rate cut by the Reserve Bank of India (RBI), whose Monetary Policy Committee meets this week, will help revive growth further in tandem with the Centre’s stimulus, Mr. Pandey said: “Let’s wait for Friday. They will decide autonomously. I will not hazard any guess on what the RBI will do but its stance has been that inflation is coming down… Now, what is the level they will be comfortable to announce a rate cut, is for them to decide.”

The Budget, he said, is “absolutely non-inflationary”, with the fiscal deficit reined in at 4.4% of GDP. He dismissed suggestions that public capex has not been pushed this time, saying they “reflect inadequate understanding”.

“Our effective capital expenditure is kept at ₹15.48 lakh crore, not just the ₹11.21 lakh crore to be directly spent by the Centre, as government funding will help States’ capex too. On top of that, there is another ₹5 lakh crore from public sector firms, so total capex is about ₹20 lakh crore,” he explained.

 Labour Minister Mansukh Mandaviya 
| Photo Credit: Special arrangement

The Labour Ministry got its highest ever allocation in this year’s Union Budget and the increase in funding will help focus on the new employment generation scheme, Labour Minister Mansukh Mandaviya said on Sunday (February 2, 2025). The “record ₹32,646 crore” allocation is almost 80% higher than last year’s revised estimates, he added.

The Ministry’s main focus is the new Employment Generation Scheme, for which the budgetary allocation has been doubled from ₹10,000 crore to ₹20,000 crore. “The allocation under the Employees’ Pension Scheme has been increased by ₹300 crore and under the PM Shram Yogi Maandhan Yojana by 37% compared to last year,” he said. 

Commenting on the social security benefits for gig workers, Dr. Mandaviya said that the gig workforce is a vital pillar of India’s new-age economy, driving innovation and efficiency across digital platforms. “Recognising their contribution, the government’s decision to provide them with identity cards, e-Shram registration, and healthcare security under PM Jan Arogya Yojana is a transformative step towards their social security and well-being. This initiative will empower nearly one crore gig workers,” the Minister said.

He said the Union government remains committed to extending social security benefits to workers in other unorganised sectors as well, ensuring dignity, security, and prosperity for every worker in the country.

A view of the Parliament building in New Delhi. File
| Photo Credit: The Hindu

Lok Sabha has been allocated ₹903 crore in the Union Budget, more than double the amount given to the Rajya Sabha.

A sizeable allocation — ₹558.81 crore of the total ₹903 crore — has been assigned to the Lok Sabha Secretariat, which also includes Grants in Aid to the Sansad TV.

Of the ₹413 crore allocated to Rajya Sabha, ₹2.52 crore have been assigned for salaries and allowances of the Chairman and Deputy Chairman in the Rajya Sabha Secretariat.

The Budget for Rajya Sabha also has a separate allocation of ₹3 crore for the salaries and allowances of Leader of the Opposition in Rajya Sabha and his secretariat. The Budget has also allocated ₹98.84 crore for members.

For Lok Sabha, ₹1.56 crore has been allocated for salaries and allowances of the Speaker and Deputy Speaker, and there is no separate provision for the office of the Leader of the Opposition.

There was no Leader of the Opposition in the Lok Sabha for 10 years as no Opposition party had the required numbers to be eligible for the post.

The Lok Sabha Budget allocated ₹338.79 crore for members. Lok Sabha has 543 members, while Rajya Sabha has 245.

New Delhi:

Finance Minister Nirmala Sitharaman, who presented the Union Budget yesterday, clarified that the asset monetisation plan is not a substitute to disinvestment. 

Speaking to NDTV Editor-in-Chief Sanjay Pugalia on Sunday, Ms Sitharaman said, “Asset monetisation is not a substitute for disinvestment. Asset monetisation has been going on and will continue. In the 2nd edition, we said we will plough back capital of 10 lakh crore in new projects…If there is an asset that we want to monetise with a private party, that won’t be for sale. The ownership will be with the Centre, it won’t transfer. That is not disinvestment. The revenue that we will get, we will plough back.”

“The Centre has not dismissed disinvestment. There is talk of disinvestment as well,” Ms Sitharaman added.

According to Ms Sitharaman, Public Sector Undertakings (PSU) will help in building more assets.

“Every PSU is becoming professional on its own. But the market assessment processes, they do not have it. We are helping towards value addition to assets…Our budget also focuses on meeting urban challenges,” she said.

Ms Sitharaman on Saturday announced the launch of the second Asset Monetisation Plan for the period 2025-30. The plan aims to generate Rs 10 lakh crore by monetising government-owned assets and reinvesting the proceeds into new infrastructure projects. The government will also fine-tune regulatory and fiscal measures to ensure the successful implementation of the plan.

Apart from this, the government also proposed a financial outlay of Rs 1.5 lakh crore for interest-free loans to states. These loans, with a tenure of 50 years, are aimed at boosting capital expenditure and incentivising state-level infrastructure reforms.

New Delhi:

Finance Minister Nirmala Sitharaman said the Centre has introduced custom duty rationalisation to ensure the Indian economy becomes aatmanirbhar (self-reliant).

Ms Sitharaman was responding to NDTV’s Sanjay Pugalia on whether the budgetary announcement of reducing custom duty for many automobiles, which will benefit companies like Tesla and Harley Davidson, is a signal amid US President Donald Trump’s tariff announcements.

“We are looking at our own economy. We are looking strengthen the foundation of the Indian economy, to make it a manufacturing hub,” she said.

Ms Sitharaman added that the Union Budget’s announcement of reducing custom duty aims at making cheap raw materials available for MSMEs, getting critical minerals and allowing Indian companies to import materials and export a finished product of high value.

Tariffs on Harley Davidson bikes were slashed further ahead of Prime Minister Narendra Modi’s proposed US visit. For motorcycles with engine capacity not exceeding 1600 cc, the duty on CBUs (Completely Built Up) has been slashed from 50 per cent to 40 per cent. For larger motorcycles with engine capacity exceeding 1600 cc, the reductions are higher. 

Though basic customs duty on the import of cars and other motor vehicles has also been reduced, it is not clear whether their effective duty rates will change. 

The finance minister said the government has created a balance between strengthening the foundation of a ‘Viksit Bharat’ and equally focusing on key sectors like health, nutrition and education through welfare schemes.

She also rejected criticism by the Opposition that the BJP-led Centre was only trying to woo voters in Bihar and Delhi through the announcements in the Union Budget.

Ms Sitharaman presented the Union Budget 2025-26, her eighth consecutive presentation, on Saturday.