India continues to be one of the fastest-growing economies, with GDP growth projected at 6.8% in 2026. The estimated GDP growth rate of India for FY25 has been pegged at 6.4%, as per economic survey. This growth rate is more than double the global average, making India a key driver of global economic expansion. This year, the budget has focused the development proposals on the ten broad areas focusing on Garib, Youth, Annadata and Nari. The budget has emphasised on the four power engines for growth and development namely, Agriculture, MSMEs, Investments and Exports.

The Government has shown its commitment to stay on the path of fiscal glide and fiscal consolidation. The fiscal deficit has been estimated at 4.8% of the GDP which is aimed to be further reduced to 4.4% next year. Broadly, this is a balanced budget with focus on measures to accelerate growth, inclusive development and increase consumption. The rising Indian middle class has a reason to cheer with reduced tax burden and more income at disposal which may be channelised for further investment and boost demand. As rightly said by Hon’ble FM, at the completion of first quarter of 21st Century, this budget in continuation will lead us to achieve the vision of Viksit Bharat.

On Direct tax front, clearly, the focus of the government was to give relief to the country’s middle-class taxpayers and thereby boost consumption. A long-standing demand of middle-class taxpayers of raising the exemption limit has been honoured by the government by raising the tax exemption bar from existing INR 7 Lakhs to INR 12 Lakhs under the new tax regime giving cheers to the major earning population of the nation. Thus, no tax upto an income of INR 12 Lakhs [or say upto income of INR 1 Lakh per month] is exhilarating to the middle class and to be honest something beyond our expectations. Apart from the raising the exemption limits the government has also tweaked the slab rates across the board to further reduce the tax burden on small and middle-class taxpayers. 

On the indirect taxes, as a part of review of custom rates structure, rate structure has been rationalised leaving only eight rates including zero rate.

Click below to read and download our detailed analysis of Union Budget 2025.

For more details please click here S.R. Dinodia_Union Budget 2025_Highlights