Budget 2025: Tax changes, Bihar schemes, gig benefits
The Union government on Saturday announced several major initiatives for poll-bound Bihar in the FY26 Budget. Key highlights include the establishment of a makhana board to support farmers and enhance production, along with a greenfield airport to improve regional connectivity. These initiatives aim to boost the state’s economy, create employment, and strengthen infrastructure. Additionally, the budget includes sector-specific incentives, investments in rural development, and support for agricultural advancements. With these announcements, the government seeks to address Bihar’s developmental needs and appeal to voters ahead of the upcoming elections.
Finance Minister Nirmala Sitharaman presented Budget 2025 in the Lok Sabha, marking her eighth consecutive budget speech. With a focus on next-generation reforms, Budget 2025 introduced measures to simplify tax laws, increase foreign direct investment (FDI) in the insurance sector, and provide fiscal support for welfare schemes. Despite these allocations, the government remained committed to fiscal consolidation, aiming to reduce the fiscal deficit to 4.4% of GDP in FY26, down from 4.8% in the current financial year.
To bridge the fiscal gap, Budget 2025 outlined plans to raise resources from the market, targeting a net borrowing of Rs 11.54 lakh crore for the next fiscal year. Gross borrowing is projected at Rs 14.82 lakh crore, aligning with last year’s figures. These moves signal the government’s intent to maintain economic stability while continuing investments in infrastructure and social programs.
Relief for Middle Class and Marginalized Communities
Budget 2025 brought significant relief to the middle class by exempting annual incomes up to Rs 12 lakh from income tax. Additionally, the government revised tax slabs, reducing the burden on salaried individuals. A person earning Rs 12 lakh annually will save Rs 80,000 in taxes, while those with Rs 18 lakh annual income will benefit from Rs 70,000 in tax reductions.
The government also announced several measures for marginalized sections, particularly gig workers. Budget 2025 introduced a social security plan for gig and platform workers, ensuring healthcare benefits under the PM Jan Arogya Yojana. Additionally, gig workers will receive ID cards through the e-Shram portal, facilitating access to government schemes. These measures are expected to benefit nearly 1 crore gig workers across the country.
Education also received a major boost in Budget 2025. The government announced broadband connectivity for all government secondary schools, bridging the digital divide and providing students with enhanced learning opportunities. Sitharaman highlighted the establishment of 50,000 Atal Tinkering Labs to foster scientific curiosity among students. Additionally, Budget 2025 proposed the Bharatiya Bhasha Pustak scheme, allowing students to access educational content in their native languages.
Higher education was another priority, with the expansion of infrastructure in five IITs set up after 2014. These institutions will gain additional facilities to accommodate 6,500 students, enhancing India’s technical education sector.
Special Focus on Bihar
With Bihar heading into elections, Budget 2025 included several big-ticket projects for the state. The government announced the establishment of a Makhana Board to improve production, processing, and marketing of makhana, a key agricultural product in the region. Sitharaman emphasized that Farmer Producer Organizations (FPOs) would be formed to support makhana farmers and ensure they benefit from government schemes.
Budget 2025 also earmarked funds for the Western Koshi Canal Project, a crucial infrastructure development initiative for the Mithilanchal region. Further, Bihar will see the development of a greenfield airport and capacity expansion at Patna airport. A brownfield airport will also be established at Bihta, improving connectivity and boosting economic opportunities in the state.
To strengthen the food processing sector, Budget 2025 announced the creation of a National Institute of Food Technology, Entrepreneurship, and Management in Bihar. Additionally, IIT Patna will receive funding to expand hostel and academic infrastructure, benefiting students and researchers.
Key Infrastructure and Development Measures
Budget 2025 emphasized infrastructure development, including a new UDAN scheme to connect 120 additional airports. This initiative is expected to facilitate air travel for 4 crore passengers over the next decade. The government also allocated funds for electricity distribution reforms and intra-state transmission improvements, aiming to enhance the financial stability of DISCOMS.
Healthcare also received attention in Budget 2025, with plans to establish cancer centers in various districts across the country. Furthermore, the government announced an expansion of medical education, aiming to create 75,000 additional medical seats over the next five years.
To support farmers, Budget 2025 increased the credit limit under the Kisan Credit Card scheme from Rs 3 lakh to Rs 5 lakh. The credit guarantee cover was doubled to Rs 20 crore, and the guarantee fee was reduced to 1%, making credit more accessible to farmers. Additionally, a six-year plan was launched for self-sufficiency in pulses, focusing on Toor and Urad production.
Tourism and Logistics Reforms
Budget 2025 placed a strong emphasis on tourism, particularly on the development of Buddhist religious sites. The government identified 50 major tourist destinations for integrated development in collaboration with state governments. This initiative aims to boost domestic and international tourism, creating employment opportunities in the hospitality sector.
The logistics sector will also see major improvements, with India Post being transformed into a large public logistics organization. Over 1.5 lakh rural post offices will become economic catalysts, enhancing rural connectivity and enabling faster delivery services.
Fiscal Consolidation and Market Borrowing
Sitharaman reiterated the government’s commitment to fiscal prudence in Budget 2025. The fiscal deficit target for FY26 is set at 4.4% of GDP, with measures in place to gradually reduce borrowing. Market borrowings are planned to remain stable, ensuring economic stability while funding crucial development projects.
As part of tax reforms, Budget 2025 introduced a new Income Tax Bill aimed at reducing litigation and simplifying tax regulations. The bill is expected to streamline tax administration and provide relief to businesses and individuals. Furthermore, FDI in the insurance sector was raised from 74% to 100%, signaling a move towards attracting more foreign investment.
Opposition’s Reaction and Political Context
While Budget 2025 included several people-centric measures, the opposition expressed skepticism about its long-term impact. Congress MP Jairam Ramesh questioned whether the budget would provide substantial relief to the middle class or encourage private investment.
Prime Minister Narendra Modi, however, remained optimistic, expressing confidence that Budget 2025 would uplift the poor and middle class. Ahead of the budget session, Modi invoked the blessings of Goddess Lakshmi, hoping for prosperity for all economic segments.
Conclusion
Budget 2025 presented a comprehensive roadmap for economic growth, focusing on tax relief, social security, infrastructure, and agriculture. By balancing fiscal consolidation with developmental spending, the government aims to maintain financial stability while addressing the needs of various sectors. With significant allocations for Bihar, gig workers, and education, Budget 2025 sets the stage for long-term economic progress and electoral considerations.