Understanding the sectoral trends of the Union Budget 2025

The Union Budget 2025 allocated ₹11.21 lakh crore in capital expenditures. Know more about the budget roadmap for different industries.

The Union Budget 2025 tabled was met with appreciation from taxpayers. The primary cause of the response was the announcement of zero tax payable for income up to ₹12 lakhs.

However, the tax policy is not the sole highlight of the Budget 2025. It ushered multiple sectoral targets and policies that can be expected to create a lasting impact on the economy. The Budget 2025 can inject new vigour into certain industries while opening up doors for certain unchartered territories like the nuclear sector.

This blog attempts to make a complete dissection of the key sectoral highlights of the Union Budget.

Macro-economic takeaways

Before getting into the impact of budget 2025 on different sectors, it is important to understand the macroeconomic aspect of the Budget. This section implies the forecasts for the economy as a whole. Listed below are a few key takeaways.

• Estimates for total expenditures and total receipts (excluding borrowings) are ₹50.65 lakh crore and ₹34.96 lakh crore, respectively.
• The expected amount of net tax revenue is ₹28.37 lakh crore.

Particular	Expected growth rate (%)
Gross tax revenue	10.8
Net tax receipts	11
Gross direct tax	12.7
Gross indirect tax	8.3

• An estimated 4.4% of GDP is the fiscal deficit.
• The expected overall market borrowings amount to ₹14.82 lakh crore.
• FY2025–2026 is allocated ₹11.21 lakh crore in capital expenditures.

Impact of Budget on the agriculture sector

Among the goals of the Budget 2025 listed by Minister Sitharaman was the aim to enable farmers to lead India into becoming the Food Capital of the world. Following are the key takeaways from the Union Budget 2025.

• Prime Minister Dhan Dhanya Krishi Yojna

To boost production and implement crop diversification, the budget launched the “Prime Minister Dhan-Dhaanya Krishi Yojana” in collaboration with states that span hundred districts. The scheme also aims to expand post-harvest storage and upgrade irrigation systems. It is also set to target the long-term and short-term finance more accessible

• Rural Prosperity and Reliance Programme

In collaboration with state governments, a comprehensive multi-sectoral program called “Rural Prosperity and Resilience” will be introduced to solve agricultural underemployment through investment, technology, skill development, and boosting the rural economy. Creating plenty of chances in rural regions is the aim of this policy. It emphasises landless families, small-scale and marginalised farmers, young farmers, and rural women.

• Atmanirbharta in pulses

The Indian government will begin a six-year “Mission for Aatmanirbharta in Pulses,” with a particular emphasis on Tur, Urad, and Masoor, according to the Union Finance Minister. Over the following four years, central agencies like NAFED and NCCF will be prepared to purchase as much of these three pulses as farmers are willing to provide.

• Increasing efficiency

To significantly advance agriculture and related activities, the Budget 2025 has included initiatives for the Comprehensive Programme for Vegetables & Fruits, the National Mission on High Yielding Seeds, and a five-year Mission for Cotton Productivity.

• Improved Financing

Budget 2025 stated that the credit limits for loans obtained through Kisan Credit Cards under the amended interest subvention plan would now be ₹5 lakh instead of ₹3 lakh.

MSMEs and the Budget 2025

The Micro, Small and Medium enterprises contribute to 45% of exports. Minister Sitharaman described this sector as the “second power engine for development”. Following are the reforms ushered in by the Union Budget 2025 in this sector.

• Enhanced investment and turnover limit

The investment and turnover limitations for all MSMEs were increased to 2.5 and 2 times, respectively. Additionally, measures have been proposed to improve loan availability with guarantee cover.

• Inclusivity

The Finance Minister also announced a new initiative for five lakh women and debutant entrepreneurs from Scheduled Castes and Scheduled Tribes. Over the following five years, it will offer term loans up to ₹2 crore.

• Toys

The country is set to embark on a plan to establish India as a global centre for toys with the ‘Made in India’ label. To support “Make in India,” the government will establish a National Manufacturing Mission that would encompass MSMEs

Impact of Union Budget 2025 on the Defence Sector

The highlights of Budget 2025 regarding the defence sector are shown in a tabular form below.

Particulars	Amount Allocated (Cr.)	Increase (%) from 2024-25
Total allocation	6,81,210	9.5%
Capital Outlay	1,80,000	4.65%
Revenue expenditure	3,11,732	10.24%

Pharma

The Union Budget 2025 announced multiple provisions for the Pharma industry. The key highlights of the Budget 2025 are discussed below.

• Effective from 2nd February 2025, 36 new life-saving medications and associated bulk medications will be free from Basic Custom Duty.
• Over the following three years, daycare cancer centres are set to be established in each district hospital. 200 centres are anticipated by the fiscal year 2025–2026.
• The Government of India intends to add 10,000 medical positions in the upcoming year to boost medical education.
• Encouraging medical travel and healing in India through business sector cooperation, capacity expansion, and streamlined visa requirements.

Conclusion

The Union Budget 2025 has tried to give a significant push to the Indian industries. Not only the industry-specific reforms but also the overall tone of the Budget 2025 is aimed at promoting fiscal growth. The reduction of tax liability for the middle class will increase the disposable income in the hands of the common people. It will ultimately increase the market demand, resulting in a boost to the sectors that had been sluggish.

DISCLAIMER: This article is not meant to be giving financial advice. Please seek a registered financial advisor for any investments.