Structure of Union Budget

Session 7

Ranjan Kumar Mohanty

Xavier Institute of Management (XIMB)
XIM University
Personal Web: [Link]
 Budget Structure in India : Union Government
 Budget Speech (Major Policy Statement, broad priorities).
 Budget Highlights (Key Features)
 It is broadly a summary of the announcements made in the Budget Speech. (e.g., govt reforms, energy, social sector,
MSME & Industry, Migrant workers, agriculture and allied sectors etc.)

 It also explains, in brief, the budget proposals for allocation of funds to be made in important areas. (health, industry,
infrastructure, urban development, housing etc.)

 The summary of tax proposals is also delineated in the document.

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 Budget Structure in India : Union Government
 Budget At Glance: Details in brief about receipts and disbursements, highlights the
major deficit indicators of the Central Government.
Sources of Revenue and Expenditure
 Sources of Revenue and Expenditure

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 Budget Highlights(2025-26)
 The theme: Sabka Vikas: Recognises 4 Engines of Development – Agriculture, MSME, Investment And Exports.
 The Budget proposes development measures focusing on the poor (Garib), Youth, farmers (Annadata) and women
(Nari).
 The government has estimated a nominal GDP growth rate of 10.1% in 2025-26.
 Fiscal deficit in 2025-26 is targeted at 4.4% of GDP, lower than the RE of 4.8% of GDP in 2024-25.
 Revenue deficit in 2025-26 is targeted at 1.5% of GDP. This is lower than the RE of 1.9% in 2024-25.
 In 2025-26, outstanding liabilities are estimated to be 56.1% of the GDP. The central government aims to
reduce its outstanding liabilities to around 50% of GDP by March 2031.
 The government is estimated to spend Rs 50,65,345 crore in 2025-26 (from ₹ 4,82,0512 crore in 2024-25
(BE), amounting to a growth of 5.1%). Revenue expenditure is estimated to increase by 6.7% and capital
expenditure by 10.1% over the revised estimate of 2024-25.
 The receipts (other than borrowings) in 2025-26 are estimated to be Rs 34,96,409 crore, about 11.1% higher
than the revised estimate of 2024-25. Tax revenue which forms major part of the receipts is also expected
to increase by 11% over the revised estimate for 2024-25.
 Budget Highlights…..
 Main tax proposals
 No income tax payable upto income of ` 12 lakh.
 Annual income of up to Rs 12 lakh will receive 100% rebate
on the taxable income. This limit will be ` 12.75 lakh for
salaried tax payers, due to standard deduction of ` 75,000.
 The limit for tax deduction on interest income for senior
citizens has been doubled from ₹50,000 to ₹1 lakh for
senior citizens Proposed Income Tax
slab
 Increase in limits for TDS and TCS (The threshold 0-4 lakh rupees Nil
4-8 lakh rupees 5 per cent
to collect tax at source):
8-12 lakh rupees 10 per cent
 The slab for TDS on Rental income has been doubled from ₹ 12-16 lakh rupees 15 per cent
2.4 lakh to ₹ 6 lakh. The tax slab for TCS on remittances 16-20 lakh rupees 20 per cent
has also seen an increase from ₹ 7 Lakh to ₹ 10 lakh. 20- 24 lakh rupees 25 per cent
Above 24 lakh
 Income tax exemption for startups: 30 per cent
rupees
 Startups incorporated up to April 1, 2025 can currently
avail income tax exemption for three consecutive years
during the first ten years of operation.
 Budget Highlights…..
 Main tax proposals continued……
 Customs duty:
 36 life-saving drugs have been exempted from BCD. In addition, 6 drugs will attract
concessional customs duty.
 37 medicines along with 13 new patient assistance programs are added to the list
of exemptions from BCD provided they are provided free of cost to patients.
 Make in India-
 Tax Exemption to open cell for LED/LCD TV, looms for textiles, capital goods for
lithium ion battery of mobile phones and Evs.
 NGOs:
 Tax exemption under Section 12A is valid for five years, and requires renewal after
that. The validity has been increased to 10 years for institutions with income up to
five crore rupees in each of the previous two years.
 As a result of these proposals, revenue of about ₹ 1 lakh
crore in direct taxes and ₹ 2600 crore in indirect taxes
will be forgone.
 Budget Highlights…..
 Infrastructure:
 National Geospatial Mission will be started to modernise land records and urban
planning. Each infrastructure-related ministry will formulate a three-year pipeline of
projects that can be implemented in public-private partnership mode.
 India Post will be transformed as a large public logistics organisation and
will be repositioned to provide several services (like credit to SMEs, act as an
accounting centre for rural enterprises, grant insurance, and assist in digital
services to small businesses ) in rural areas.
 A modified UDAN scheme will be launched to improve connectivity to 120 new
destinations and carry four crore passengers in next 10 years.
 A Maritime Development Fund with a corpus of Rs 25,000 crore will be set up, with
49% contribution by the government.
 Broadband connectivity will be provided to all government secondary schools and
primary health centres in rural areas.
 Top 50 tourist destination sites to be developed in partnership with states.
 Greenfield airports will be developed in Bihar, alongside the expansion of
Patna airport and a brownfield airport at Bihta (Patna).
 Energy:
Budget Highlights…..
 Additional borrowing of 0.5% of GSDP will be allowed to states based on electricity distribution
reforms and augmenting intra-state transmission capacity.
 The Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be amended to allow
private sector partnerships for development of nuclear energy. (building 100 GW of nuclear capacity
for oncoming energy transition to Net Zero by 2047.)
 A Nuclear Energy Mission will be launched for the development of small modular reactors with an
outlay of Rs 20,000 crore.

 Agriculture:
 The central government will launch a six-year mission to achieve self-reliance in pulses. Central
agencies will procure three pulses (Tur, Urad & Masoor), as much as offered, from farmers over the
next four years.
 In addition, programmes will be launched for availability of high-yield variety seeds and increasing
cotton productivity.
 Prime Minister Dhan-Dhaanya Krishi Yojana will be implemented to improve productivity, crop
diversification, and credit access while improving storage facilities in 100 low-productivity districts.
The initiative will support 1.7 crore farmers through eco-friendly practices and financial aid.
 Loan limit under the Modified Interest Subvention Scheme will be increased from three lakh
rupees to five lakh rupees for loans availed through the Kisan Credit Card.
 Budget Highlights…..
 Labour and Employment:
 PM SVANidhi Scheme to provide affordable loans to street vendors will be revamped to provide
UPI-linked credit cards with Rs 30,000 limit, enhanced bank loan, and capacity-building support.
 Gig workers will be provided access to healthcare benefits under PM Jan Arogya Yojana,
benefiting nearly 1 crore workers.
 A new scheme will be launched to provide loans up to two crore rupees to five lakh women,
scheduled castes, and scheduled tribes first-time entrepreneurs.

 Education:
 In the next year, 10,000 additional seats will be added in medical colleges and hospitals with a
goal of adding 75,000 seats in the next five years.
 Additional infrastructure will be created in five IITs started after 2014 to facilitate education for
6,500 more students.
 Under the PM Research Fellowship scheme, 10,000 fellowships will be provided for technological
research in IITs and IISc.
 Atal Tinkering Labs: 50 Thousand Labs to be set up in government schools in next 5 years.
 Centre of Excellence in Artificial Intelligence for education with a total outlay of ₹500 crore.
 Budget Highlights…..
 Urban and Rural Development:
 Urban Challenge Fund of one lakh crore rupees will be set up to implement projects for development of cities.
 A scheme worth Rs 15,000 crore will be established to complete the construction of one lakh housing units in
stressed projects.
 Investment Friendliness Index:
 In 2025, NITI Aayog will launch an Investment Friendliness Index to rank states on investment efficacy,
fostering competitive cooperative federalism by assessing opportunity and risk factors.
 Industry and Commerce: (MSMEs)
 To improve credit access, credit guarantee cover will be increased: (i) from five crore rupees to Rs 10 crore for
micro and small enterprises, (ii) from Rs 10 crore to Rs 20 crore for start-ups, and (iii) up to Rs 20 crore for
exporter MSMEs.
 Investment and turnover limits for classification of MSMEs will be at least
doubled.

 For micro enterprises registered on the Udyam portal, 10 lakh credit cards with a credit
limit of Rs 5 lakh will be provided within the first year of the scheme.
 Budget Highlights…..
 Export Promotion Mission:
 With sectoral and ministerial targets to facilitate easy access to export
credit, cross-border factoring support, and support to MSMEs to tackle non-
tariff measures in overseas markets.
 Bharat Trade Net: A digital public infrastructure, ‘BharatTradeNet’ (BTN)
for international trade will be set-up as a unified platform for trade
documentation and financing solutions. Support for integration with Global
Supply Chains.
 National Framework for GCC: As guidance to states for promoting Global
Capability Centres in emerging tier 2 cities.
 Warehousing facility for air cargo: To facilitate upgradation of infrastructure
and warehousing for air cargo including high value perishable horticulture
produce.
 Duty free inputs for handicraft and leather sectors.
 Finance:
 The FDI limit for the insurance sector will be increased
Ministry-wise expenditure in 2025-26 (Rs crore)

 Top 13 ministries in terms of allocations account for 53% of the estimated total expenditure
Department-wise Budget Provisions: A Comparative View
Budget Budget
Changes in sectrol wise
Estimates Estimates
Sectors budget provisions (2024-
2024-2025 2025-2026
25 to 2025-26)
(share of GDP) (share of GDP)
Ministry of Defence 1.91% 1.91% 0.003% ▲
Ministry of Road Transport and Highways 0.85% 0.80% -0.047% ▼
Ministry of Railways 0.78% 0.72% -0.067% ▼
Ministry of Consumer Affairs, Food and Public Distribution 0.68% 0.60% -0.080% ▼
Ministry of Home Affairs 0.67% 0.65% -0.020% ▼
Ministry of Chemicals and Fertilizers 0.52% 0.45% -0.063% ▼
Ministry of Rural Development 0.55% 0.53% -0.019% ▼
Ministry of Agriculture and Farmers Welfare 0.41% 0.39% -0.020% ▼
Ministry of Communications 0.42% 0.30% -0.118% ▼
Ministry of Education 0.37% 0.36% -0.009% ▼
Ministry of Jal Shakti 0.30% 0.28% -0.024% ▼
Ministry of Health and Family Welfare 0.28% 0.28% 0.001% ▲
Ministry of Housing and Urban Affairs 0.25% 0.27% 0.018% ▲
Ministry of Petroleum and Natural Gas 0.05% 0.05% 0.005% ▲
Ministry of Women and Child Development 0.08% 0.08% -0.005% ▼
Department of Atomic Energy 0.08% 0.07% -0.009% ▼
Ministry of Micro, Small and Medium Enterprises 0.07% 0.06% -0.003% ▼
Ministry of Power 0.06% 0.06% -0.002% ▼
Ministry of External Affairs 0.07% 0.06% -0.010% ▼
Ministry of Electronics and Information Technology 0.07% 0.07% 0.006% ▲
Expenditure on Major Schemes

 The total allocation for Pivotal

Welfare Schemes has showed a
marginal change to 3.10 % of the
Budget Size in FY 2025-26 (B.E.)
from 3.15 % in FY 2024-25 (B.E).
Allocations for women, children, SCs, STs and NER (Rs crore)

Food subsidy and fertiliser subsidy in

2025-26 together constitute 87% of the
total subsidy bill. LPG subsidy
constitutes 3% of the total subsidy bill.
Top Ten Ministry / Department on the basis of CAPEX
Capital Expenditure
[Link] Ministry/Department (₹ in Crores), 2025-
26 (BE)
1 Ministry of Road Transport and Highways 272241.15
2 Ministry of Railways 252000.00
3 Ministry of Defence 192387.62
4 Ministry of Communications 52743.10
5 Ministry of Housing and Urban Affairs 37623.38
6 Ministry of Home Affairs 22411.41
7 Ministry of Science and Technology 20097.46
8 Department of Atomic Energy 11977.64
9 Ministry of Petroleum and Natural Gas 6626.13
10 Department of Space 6103.63

The Ministry of Road Transport and Highways, Ministry of Railways and Ministry
of Defense have continued to receive major thrust, more than 17% of total
Capex in FY 2025-26. This indicates strong emphasis on infrastructure
and national security in building India.
 Budget at a Glance 2025-26 (Rs
crore)

 Capital expenditure has been pegged at 3.14% of GDP in FY 2025-26 (B.E.) against 3.40% of GDP in FY 2024-25 (B.E.).
 Revenue Expenditure has been pegged at 11.05% of GDP in FY 2025-26 (B.E.) against 11.37% of GDP in FY 2024-25
(B.E.).
Some Snap shots from Budget
Some News piece on Union Budget
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