India - Annual Key Areas Budget Expenditure Core Features

Key Chapter Title List

1. Measures to Promote Agricultural Growth and Rural Prosperity
2. Support for MSMEs and Advancement of "Make in India"
3. Human Resources, Social Justice, and Livelihood Security
4. Infrastructure and Regional Development Investment Planning
5. Financial Support for Research, Development, and Innovation
6. Export Promotion and Global Supply Chain Integration Initiatives
7. Financial Sector Reform and Development Policies
8. Tax System Reforms (Direct and Indirect Taxes)
9. Analysis of Budget Revenue-Expenditure Structure and Deficit Trends
10. Details of Resource Allocation for Major Expenditure Items

Document Introduction

This report, based on the 2025-2026 annual budget document released by the Ministry of Finance, India, in February 2025, systematically presents the national fiscal strategy framework centered on "Development as a Journey, Reform as Fuel." The core objective focuses on the vision of "Developed India" (Viksit Bharat), building a fiscal support system for inclusive growth and sustainable development around four key groups: the poor, youth, farmers, and women.

The budget positions agriculture, Micro, Small and Medium Enterprises (MSMEs), investment, and exports as four key development engines, forming a multi-dimensional policy mix. In the agricultural sector, specialized initiatives such as the National Mission for High-Yielding Seeds, the Five-Year Plan for Cotton Productivity, and the Pulses Self-Sufficiency Mission have been launched, strengthening the rural economic foundation through measures covering 170 million farmers and enhanced credit of 5 lakh rupees. In the MSME sector, policies like customized credit cards, loan schemes for first-time entrepreneurs, and increased credit guarantee limits aim to activate private sector investment vitality, while revising enterprise classification standards to expand policy coverage.

Infrastructure and people's livelihood have become focal points for fiscal investment: interest-free loans of 1.5 trillion rupees to states support infrastructure upgrades, the Jal Jeevan Mission is extended to 2028 to achieve universal drinking water coverage, and digital infrastructure is being extended to rural schools and medical centers. The education and healthcare sectors continue to expand, including adding 10,000 medical education seats, establishing district-level cancer day care centers, and setting up 50,000 Atal Tinkering Labs, building a support system for human resource development.

Fiscal reform and innovation incentives constitute important pillars of the budget: in the financial sector, the Foreign Direct Investment (FDI) limit in insurance is raised from 74% to 100%, and a unified KYC registration system and simplified approval measures for corporate mergers and acquisitions are introduced. In the innovation sector, 2 trillion rupees are invested to support private sector-led R&D activities, with specialized plans such as establishing Centers of Excellence for Artificial Intelligence and a National Geospatial Mission. Tax system reforms focus on reducing the burden on the middle class, adjusting personal income tax slabs, increasing the TDS exemption limit on rent, and optimizing the customs duty structure to promote manufacturing and exports.

The budget revenue-expenditure structure shows that the fiscal deficit and revenue deficit for 2025-26 remain at controllable levels, with defense, rural development, home affairs, and agriculture being the main expenditure areas. The overall policy design, through precise allocation of fiscal resources, aims to strengthen traditional economic pillars while laying the groundwork for emerging sectors. It seeks to enhance the consumption capacity of the middle class, activate private sector vitality, and strengthen the nation's long-term competitiveness, thereby laying a solid fiscal foundation for the vision of a "Developed India."