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Smt. Nirmala Sitharaman’s reply in rajya Sabha on budget 2025-26
Union Finance Minister Smt. Nirmala Sitharaman on 13 February 2025 addressed the Rajya Sabha, thanking members for their participation in the budget discussion. She emphasized external challenges in budget planning, the impact of global fragmentation, and the need to secure India’s economic interests. Following is the highlights of her reply:
Union Finance Minister Smt. Nirmala Sitharaman during the address highlighted that India’s GDP was projected to grow by 6.4% in real terms and 9.7% in nominal terms. The budget focused on growth acceleration, inclusive development, and strengthening private sector investments, with special emphasis on the upliftment of the Garib (poor), Yuva (youth), Annadata (farmers), and Nari (women).
Sectoral Allocations in the Union Budget
The Finance Minister emphasized the importance of capital expenditure, which was projected at Rs. 15.48 lakh crore for 2025-26, an increase from Rs. 13.18 lakh crore in 2024-25. With public enterprise investments included, the capital outlay could reach Rs. 19.80 lakh crore. She detailed sectoral allocations as follows:
The budget focused on growth acceleration, inclusive development, and strengthening private sector investments, with special emphasis on the upliftment of the Garib (poor), Yuva (youth), Annadata (farmers), and Nari (women).
• Agriculture and allied activities: Rs. 1.71 lakh crore
• Rural development: Rs. 2.67 lakh crore
• Urban development and transport: Rs. 6.45 lakh crore
• Health and education: Rs. 2.27 lakh crore
• Defence spending (excluding pensions): Rs. 4.92 lakh crore
She asserted that resource allocation to states had increased, reaching Rs. 25.1 lakh crore for 2025-26, an increase of Rs. 4.92 lakh crore compared to 2023-24.
Key Features of Budget Making
Sitharaman compared the post-COVID economic recovery to the 2008 global financial crisis, noting India’s transition from the ‘fragile five’ to one of the world’s top five economies. She stressed the importance of fiscal transparency, digital technology adoption, and structural reforms in budgeting. A major reform was the inclusion of the Food Corporation of India’s (FCI) off-budget borrowing of Rs. 1.2 lakh crore into the budget. She also highlighted the introduction of 50-year interest-free capital assistance to states, which grew from Rs. 12,000 crore in 2020-21 to Rs. 1.5 lakh crore in the current year.
Tax Reforms and Budgetary Measures
The Finance Minister addressed concerns regarding taxation and relief measures:
• The new tax regime became the default, with individuals having the option to opt for the old regime.
• The tax exemption limit increased to Rs. 12 lakh, ensuring zero tax liability for individuals earning up to this amount.
• She dismissed misleading interpretations of the new tax regime and provided calculations on marginal relief.
• The Mahila Samman Bachat Patra and increased deposit limits for senior citizens ensured financial security.
Fiscal Reforms and Debt Consolidation
The Finance Minister emphasized:
• Reduction of short-term T-Bill borrowings, easing liquidity constraints for private-sector borrowers.
• Buyback of G-Secs worth Rs. 88,000 crore, resulting in interest savings of approximately Rs. 5,000 crore.
Regarding inflation, she noted that CPI inflation had fallen to 4.31% in January 2025, closer to the RBI’s target of 4%. Food inflation was managed through tariff-free imports and an expected 5.7% increase in food grain production
• A clear debt reduction pathway, aiming to reduce government debt from 58% of GDP to 50% by 2031.
• Efficient utilization of unspent funds across schemes to reduce unnecessary borrowing.
Employment, Economic Growth, and Inflation Management
Smt. Sitharaman addressed employment concerns by introducing the New Employment Generation Scheme, which includes:
1. Support for first-time job seekers
2. Employer incentives for hiring in manufacturing
3. Reimbursement of EPFO contributions for new employees earning up to Rs. 1 lakh per month
Regarding inflation, she noted that CPI inflation had fallen to 4.31% in January 2025, closer to the RBI’s target of 4%. Food inflation was managed through tariff-free imports and an expected 5.7% increase in food grain production.
Agriculture and Price Stabilization Measures
The PM Dhan Dhanya Krishi Yojana was introduced to boost agricultural productivity. Other key initiatives included:
• Aatmanirbharta for Pulses to increase domestic production.
• The launch of Bharat Chana Dal and Bharat Aata to offer subsidized essential food items.
• Ensuring price stability through continuous monitoring of food supplies.
Infrastructure Development and Support to States
The Minister clarified that all states were consulted in budget formation and highlighted allocations for major infrastructure projects. Key initiatives included:
• Rs. 1.5 lakh crore for capital assets under the PM Gati Shakti program.
• National highway and rail projects across multiple states.
• Support for state-led infrastructure development, ensuring fair allocations across political lines.
Support to MSMEs and Economic Reforms
Key steps taken to strengthen MSMEs included:
• Enhanced credit limits and exit mechanisms.
• Customised credit cards offering up to Rs. 5 lakh for micro-entrepreneurs.
• New term loan scheme providing up to Rs. 2 crore for first-time entrepreneurs.
• Removal of duty barriers for key industries like leather and footwear.
Smt. Nirmala Sitharaman reaffirmed the Government’s commitment to economic growth, fiscal responsibility, and social welfare. She emphasized that the budget was designed to promote inclusive development, private-sector growth, and financial stability while ensuring increased capital investments for long-term economic resilience. Addressing concerns over tax reforms, employment generation, inflation, and infrastructure development, she reiterated that the Government remains dedicated to balancing fiscal discipline with growth-oriented policies.