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Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman presented Union Budget 2025-26 in the Parliament.

Key Highlights:

Fiscal Policy and Macroeconomic Indicators

• Total Expenditure: ?50.65 lakh crore
• Total Receipts (excl. borrowings): ?34.96 lakh crore
• Fiscal Deficit: 4.4% of GDP
• Gross Market Borrowing: ?14.82 lakh crore
• Capital Expenditure: ?11.21 lakh crore (3.1% of GDP)

Agriculture and Allied Sectors

• Prime Minister Dhan-Dhaanya Krishi Yojana: 100 low-productivity districts targeted; 1.7 crore farmers to benefit.
• Mission for Aatmanirbharta in Pulses: 6-year mission on Tur, Urad, and Masoor; NAFED/NCCF to procure for 4 years.
• Vegetables & Fruits Program: Comprehensive initiative for production, pricing, processing, and logistics.
• Makhana Board: New board in Bihar for production, value addition, and export.
• National Mission on High Yielding Seeds: To commercialize over 100 high-yielding seed varieties.
• Cotton Mission: 5-year initiative to boost productivity and Extra Long Staple (ELS) varieties.
• Fisheries: New EEZ and High Seas Framework focusing on Islands.
• Credit through KCC: Loan limit increased from ?3 lakh to ?5 lakh.
• Urea Plant in Assam: New plant at Namrup (12.7 lakh MT annual capacity).

MSMEs and Startups

• MSME Classification: Investment and turnover limits doubled (2.5x & 2x).
• Credit Cards for Micro Units: ?5 lakh limit; 10 lakh cards in year one.
• ?10,000 Cr Fund of Funds for Startups
• First-Time Entrepreneurs Scheme: Loans up to ?2 crore for 5 lakh women, SC/ST entrepreneurs.
• Footwear & Leather Sector Scheme: Aims ?4 lakh crore turnover and 22 lakh jobs.
• Toy Manufacturing Support: High-quality, eco-friendly toy ecosystem.
• Food Tech Institute: To be established in Bihar.
• National Manufacturing Mission: Across small, medium, and large units.

Infrastructure and Investment

• PPP Pipeline: 3-year project pipeline to be announced.
• ?1.5 lakh crore 50-year interest-free loans to states for CapEx.
• Urban Challenge Fund: ?1 lakh crore outlay; ?10,000 crore for FY26.
• Asset Monetization Plan 2025–30: Capital recycling worth ?10 lakh crore.
• Jal Jeevan Mission: Extended to 2028 with enhanced outlay.
• UDAN 2.0: Targeting 120 new destinations, 4 crore passengers in 10 years.
• Maritime Development Fund: ?25,000 crore; up to 49% govt contribution.
• Nuclear Energy Mission: ?20,000 crore outlay for Small Modular Reactors (SMRs).
• Greenfield Airports: Announced for Bihar.

Welfare and Social Security

• Saksham Anganwadi & Poshan 2.0: Enhanced nutritional cost norms.
• Medical Education: 10,000 new MBBS seats; 75,000 in 5 years.
• Day Care Cancer Centres: In all district hospitals; 200 in FY26.
• PM SVANidhi Revamp: ?30,000 UPI-linked credit cards.
• Online Platform Workers: E-Shram ID, PMJAY coverage.
• Urban Livelihood Scheme: For sustainable urban worker incomes.

Education and Skilling

• 50,000 Atal Tinkering Labs: Govt schools in 5 years.
• Bharatiya Bhasha Pustak Scheme: Digital books in Indian languages.
• National Skilling Centres of Excellence: With global partners.
• AI in Education: Centre of Excellence with ?500 crore outlay.
• IIT Expansion: Additional capacity for 6,500 students.

Innovation and R&D

• ?20,000 crore Innovation Fund (private-led R&D).
• Deep Tech Fund of Funds: For next-gen startups.
• PM Research Fellowships: 10,000 fellowships with higher support.
• 2nd Gene Bank: 10 lakh germplasm lines for food security.
• National Geospatial Mission
• Gyan Bharatam Mission: Conservation of 1 crore+ manuscripts.

Exports and Trade

• Export Promotion Mission: With ministerial and sectoral targets.
• BharatTradeNet (BTN): Unified platform for trade finance and docs.
• GCC Framework: Promote Global Capability Centres in Tier-2 cities.

Financial Sector Reforms

• FDI in Insurance: Raised from 74% to 100% for domestic investment.
• NaBFID Credit Enhancement Facility: For infra bonds.
• Grameen Credit Score: For SHGs and rural borrowers.
• Investment Friendliness Index: To rank states in 2025.
• Jan Vishwas Bill 2.0: Decriminalization of 100+ provisions.
• Tonnage Tax Extended: To inland vessels.
• Startups: Tax benefit eligibility extended to incorporation by 1 April 2030.

Taxation Reforms

Direct Taxes

• No Personal Tax: Income up to ?12 lakh (?12.75 lakh for salaried) under new regime.
• Revised Tax Slabs (New Regime):
  • 0–4L: Nil | 4–8L: 5% | 8–12L: 10%
  • 12–16L: 15% | 16–20L: 20% | 20–24L: 25% | 24L+: 30%
• Standard Deduction: ?75,000
• Compliance Relief: Trusts registration extended to 10 years.
• TDS/TCS Rationalization: Fewer thresholds, higher limits for senior citizens and rent.
• Tax Certainty: Safe harbour rules, startup extensions, presumptive taxation for electronics.

Indirect Taxes

• Tariff Rationalization: Only 8 remaining tariff rates.
• Customs Relief: ?2,600 crore forgone, key lifeline drugs exempted.
• Support to Domestic Manufacturing:
  • EV/mobile battery manufacturing: 63 capital goods exempted
  • Ships: BCD exemption extended for 10 years
  • Marine, leather, textiles: Several BCD reductions/exemptions
• Voluntary Compliance Scheme: Without penalty for post-clearance corrections.

Overview of the River Interlinking Concept

The concept of river interlinking in India traces its origins to the 19th century, when Sir Arthur Cotton first proposed inter-basin water transfer to address irrigation issues. Over time, this idea was refined by other experts. It evolved into the National Water Grid and, later, the River-Interlinking Project (ILR) under the Ministry of Water Resources. The goal is to transfer surplus water from rivers to drought-prone areas, aiming for water security, irrigation, and power generation.

Key Projects and Initiatives

• Ken-Betwa River Link Project (KBLP): Launched in December 2024, the KBLP will link the water-surplus Ken River with the drought-stricken Betwa River. It aims to irrigate over 10 lakh hectares, supply drinking water to 62 lakh people, and generate hydropower and solar power. However, concerns over the environmental impact of building a dam within the Panna Tiger Reserve have been raised.
• National River Linking Project (NRLP): The NRLP, formally known as the National Perspective Plan, is an ambitious proposal that includes 30 river links—14 Himalayan and 16 Peninsular—to connect India's rivers and create a giant South Asian Water Grid.

Benefits of Interlinking Rivers

• Flood and Drought Mitigation: Redistributing water from surplus areas to drought-prone regions, such as Bundelkhand, will reduce the severity of floods and droughts.
• Agriculture and Irrigation: Expanding irrigation systems across 35 million hectares of land could significantly boost agricultural productivity and food security.
• Hydropower Generation: The interlinking project has the potential to generate up to 34 GW of hydropower, contributing to India's renewable energy targets.
• Economic Growth: Improving water availability can boost industries, provide drinking water, and support economic development in underdeveloped regions.
• Inland Waterways: The project will also contribute to the expansion of inland waterways, benefiting trade and reducing transportation costs.

Challenges and Concerns

• Environmental Impact:
  • Biodiversity Loss: Projects like the Ken-Betwa project raise alarms about the destruction of ecologically sensitive areas, such as the Panna Tiger Reserve.
  • River Ecosystem Disruption: Altering natural river courses can harm aquatic life, disrupt deltaic ecosystems, and degrade water quality. For instance, the Sardar Sarovar Dam's impact on the Narmada river system shows the long-term consequences of such projects.
  • Pollution: The mixing of cleaner and more polluted rivers could exacerbate water contamination issues.
• Social and Financial Costs:
  • Displacement: Large-scale interlinking projects will displace millions, especially marginalized communities and indigenous people, and disturb local livelihoods.
  • High Financial Burden: The total estimated cost of the NRLP is ?5.5 lakh crore, which does not include environmental rehabilitation costs or the long-term maintenance of the infrastructure.
• Climate Change: Predictions suggest that climate change could affect river flows and the availability of surplus water. This might render the interlinking project ineffective in the long term.
• Inter-State Conflicts: Water-sharing disputes, like the long-standing issues over the Cauvery and Krishna rivers, could intensify with more interlinking projects.
• Infrastructural Challenges: Maintaining vast canal networks and reservoirs, managing sedimentation, and acquiring land for construction are logistical hurdles.

Alternative Approaches and Solutions

• Efficient Water Management:
  • Integrated Watershed Management: Implementing a comprehensive approach to manage existing water resources can reduce the need for large-scale river transfers.
  • Groundwater Recharge: Focusing on efficient groundwater management by identifying recharge mechanisms and regulating water use is crucial for sustainability.
• Modern Irrigation Techniques:
  • Drip Irrigation: Israel’s success with drip irrigation, which reduces water use by 25%-75%, provides an example of how modern technologies can save significant amounts of water.
• Virtual Water: Emphasizing the import of water-intensive goods (like wheat) could save local water resources, which would otherwise be used for domestic agriculture.
• National Waterways Project (NWP): An alternative to the interlinking project, NWP aims to improve water management by creating navigation channels that double as water distribution networks with a fraction of the land use.

Way Forward

• Comprehensive Impact Assessments: The need for multidisciplinary studies to evaluate the environmental, social, and economic impacts of river interlinking projects cannot be overstated. Stakeholder engagement is crucial for equitable decision-making.
• Sustainable Water Policies: A national water policy should prioritize sustainable water practices, focusing on local solutions, such as water harvesting, watershed management, and smart irrigation.
• Focus on Regional Solutions: Smaller, state-specific projects should be prioritized to address water scarcity issues without triggering large-scale environmental degradation.