The Union Budget 2025-26 has drawn India’s economic growth blueprint with a strategic focus on four key engines of development—Agriculture, MSMEs, Investment, and Exports—powered by significant financial allocations and policy initiatives. The government’s estimated total receipts, excluding borrowings, stand at ₹34.96 lakh crore, while total expenditure is projected at ₹50.65 lakh crore. Net tax receipts are estimated at ₹28.37 lakh crore, with a fiscal deficit pegged at 4.4% of GDP. Gross market borrowings are expected to reach ₹14.82 lakh crore, while capital expenditure has been earmarked at ₹11.21 lakh crore, constituting 3.1% of GDP. These figures indicate a strong push towards infrastructure, economic resilience, and inclusive growth.
Recognizing agriculture as the first engine of development, the government has announced Prime Minister Dhan-Dhaanya Krishi Yojana, a transformative initiative aimed at developing 100 agri-districts with low productivity, moderate crop intensity, and below-average credit parameters. This programme, in partnership with states, will benefit 1.7 crore farmers. Further strengthening rural resilience, a multi-sectoral programme will address under-employment in agriculture by integrating skilling, investment, and technology. In a bid for Aatmanirbharta in Pulses, a six-year mission will focus on self-sufficiency in Tur, Urad, and Masoor, with NAFED and NCCF procuring these pulses for the next four years. The government is also launching a comprehensive programme for vegetables and fruits to promote production, efficient supply chains, and better prices for farmers. A dedicated Makhana Board will be established in Bihar to enhance production, processing, and marketing of the nutrient-rich crop. Meanwhile, the National Mission on High Yielding Seeds will accelerate research and development for over 100 high-yield seed varieties, ensuring their commercial availability. The fisheries sector will also see structured policy reforms with a framework for sustainable harnessing of resources, especially around the Andaman & Nicobar and Lakshadweep Islands. In addition, a five-year Mission for Cotton Productivity will enhance yield and sustainability, particularly in extra-long staple cotton. The credit ecosystem for farmers will be strengthened with an increased Kisan Credit Card (KCC) loan limit, rising from ₹3 lakh to ₹5 lakh. Moreover, the establishment of a urea plant in Assam, with an annual capacity of 12.7 lakh metric tons, aims to bolster the availability of fertilizers for farmers.
The second engine of development, Micro, Small, and Medium Enterprises (MSMEs), will witness significant structural and financial support. The government plans to revise the classification criteria for MSMEs, enhancing investment and turnover limits by 2.5 and 2 times, respectively. To empower micro-enterprises, customized credit cards with a ₹5 lakh limit will be issued to 10 lakh entrepreneurs registered on the Udyam portal in the first year. A fresh Fund of Funds with ₹10,000 crore will support startups, while a new scheme will facilitate term loans of up to ₹2 crore for 5 lakh first-time entrepreneurs from women, Scheduled Castes, and Scheduled Tribes over the next five years. The Focus Product Scheme for Footwear and Leather aims to generate 22 lakh jobs, achieve a turnover of ₹4 lakh crore, and boost exports to ₹1.1 lakh crore. A new initiative for India’s toy sector will drive innovation and sustainability, positioning the country as a global manufacturing hub. Meanwhile, a National Institute of Food Technology, Entrepreneurship, and Management will be established in Bihar to support food processing. To further the Make in India vision, a National Manufacturing Mission will provide a structured push to small, medium, and large industries.
The third engine of development, Investment, will be driven by both human capital and infrastructure expansion. The Saksham Anganwadi and Poshan 2.0 scheme will see enhanced nutritional support, while 50,000 Atal Tinkering Labs will be established in government schools over five years to encourage innovation. Rural schools and primary health centers will receive broadband connectivity under Bharatnet, and the Bharatiya Bhasha Pustak Scheme will provide digital-form Indian language books for education. Five National Centres of Excellence for Skilling will equip youth with globally relevant skills, and the infrastructure of five IITs established post-2014 will be expanded to accommodate 6,500 additional students. The establishment of a Centre of Excellence in Artificial Intelligence for Education with a ₹500 crore outlay highlights the government’s focus on digital transformation. Additionally, 10,000 medical seats will be added next year, with 75,000 seats planned over the next five years. Healthcare infrastructure will be reinforced with Day Care Cancer Centres in all district hospitals, with 200 centres to be set up in 2025-26. Urban livelihoods will be strengthened through revamped PM SVANidhi loans, including UPI-linked credit cards with a ₹30,000 limit. The government will also introduce a social security scheme for online platform workers, ensuring healthcare coverage under PM Jan Arogya Yojana.
On the economic front, Public-Private Partnerships (PPP) in infrastructure will be expanded, with ministries and states identifying projects for a three-year investment pipeline. A ₹1.5 lakh crore interest-free loan will be provided to states for capital expenditure and reforms. The Asset Monetization Plan (2025-30) aims to reinvest ₹10 lakh crore into new projects, while the Jal Jeevan Mission will be extended to 2028. The Urban Challenge Fund of ₹1 lakh crore will drive creative redevelopment and sanitation initiatives. To push forward India’s nuclear capabilities, the government will amend the Atomic Energy Act and launch a ₹20,000 crore Nuclear Energy Mission for Small Modular Reactors (SMRs), with five indigenous SMRs operational by 2033. Other key infrastructure projects include the Western Koshi Canal Project in Bihar, a Greenfield Airport in Bihar, and the revamping of the Shipbuilding Financial Assistance Policy. The Maritime Development Fund (₹25,000 crore) will see significant private sector contributions, while the UDAN scheme will be expanded to improve connectivity to 120 new destinations.
The fourth engine of development, Exports, will be powered by an Export Promotion Mission, targeting various sectors in collaboration with key ministries. A unified trade platform, BharatTradeNet, will streamline documentation and financing solutions for global trade. A National Framework for Global Capability Centres (GCCs) will encourage multinational corporations to establish operations in emerging Tier-2 cities.
Underpinning these four engines of growth, the government is also rolling out comprehensive financial sector reforms. The FDI cap in insurance will be raised from 74% to 100% for companies reinvesting the entire premium in India. NaBFID will establish a Partial Credit Enhancement Facility for corporate bonds, while public sector banks will implement a Grameen Credit Score framework to support self-help groups and rural borrowers. A new Pension Sector Forum will be introduced, along with a High-Level Committee for Regulatory Reforms to review outdated regulations. The Investment Friendliness Index of States, launching in 2025, will encourage competitive cooperative federalism. Lastly, the Jan Vishwas Bill 2.0 will decriminalize over 100 legal provisions, furthering ease of business.
In essence, the government’s strategic focus on agriculture, MSMEs, investment, and exports, supported by financial sector reforms, is poised to drive sustainable economic growth. The fiscal roadmap, coupled with transformative policy measures, reflects an intent to fortify India’s position as a global economic powerhouse while ensuring inclusive development across sectors.
