In the Budget of 2025, the finance minister (FM) Nirmala Sitharaman claimed that the government has announced six engines of growth. Most of these Some of these are overhyped; but here is a complete list.
1. Agriculture: New Schemes and Focus on Farmer Welfare
• Prime Minister Dhan-Dhaanya Krishi Yojana: A new programme, inspired by the aspirational districts programme, will be launched in partnership with states, covering 100 districts with low productivity, moderate crop intensity and below-average credit parameters. This scheme aims to enhance agricultural productivity, promote crop diversification and sustainable practices, improve post-harvest storage, improve irrigation facilities and facilitate credit availability which is expected to benefit 17 million (mn) farmers.
• Rural prosperity and resilience programme: A comprehensive, multi-sectoral programme will be launched to address underemployment in agriculture through skilling, investment and technology, aiming to generate opportunities in rural areas so that migration becomes an option, not a necessity. The programme will focus on rural women, young farmers, rural youth, marginal and small farmers and landless families. In phase-1, 100 developing agri-districts will be covered.
• Mission for Aatmanirbharta in Pulses: A six-year mission will be launched with a focus on tur, urad and masoor, with central agencies like National Agricultural Cooperative Marketing Federation of India (NAFED) and National Cooperative Consumers' Federation of India (NCFF) procuring these pulses directly from registered farmers.
• Comprehensive programme for vegetables & fruits: A programme, will be initiated to promote production, efficient supplies, processing and remunerative prices for farmers, with institutional mechanisms and farmer producer organisations.
• Makhana board in Bihar: A special opportunity is given to Bihar with the establishment of a Makhana Board in the state to improve the production, processing and marketing of makhana and organise people involved in these activities into farmer producer organisationss.
• National mission on high-yielding seeds: This mission will focus on three key areas: improving agricultural research, developing and distributing high-yield, pest-resistant and climate-resilient seeds and ensuring the market availability of over 100 new seed varieties developed after July 2024.
• Fisheries: India is the world's second-largest producer of fish and aquaculture, with seafood exports worth Rs60,000 crore. To further develop the marine sector, the government will create a supportive structure for responsible fishing within India's exclusive economic zone and on the high seas, prioritising the Andaman & Nicobar and Lakshadweep Islands.
• Mission for cotton productivity: A five-year mission will focus on improving productivity and sustainability in cotton farming and promote extra-long staple cotton varieties.
• Enhanced credit through KCC: Kisan Credit Cards (KCC) provide short-term loans to 77mn farmers, fishermen and dairy farmers. The maximum loan amount available through KCCs under the modified interest subvention scheme will increase from Rs3 lakh to Rs5 lakh.
• Urea plant in Assam: To augment urea supply, a plant with an annual capacity of 1.27mn metric tonnes (MT) will be set up at Namrup, Assam.
• India Post as a catalyst for the rural economy: India Post, with its 150,000 rural post-offices, along with the India Post Payments Bank and its extensive network of 240,000 Dak Sevaks (postal workers), will be reorganised to play a key role in boosting the rural economy.
• Support to NCDC: The government will support the National Cooperative Development Corporation (NCDC) for its lending operations within the cooperative sector.
2. MSMEs as the Second Engine: Focus on Credit, Technology and Growth
Over 10mn registered MSMEs, employing 75mn people and responsible for 36% of India's manufacturing output, are working to establish India as a leading global manufacturing centre. These MSMEs, known for their high-quality products, account for 45% of the country's exports. The Budget recognises MSMEs as the second engine, encompassing manufacturing and services, with a focus on the 57mn MSMEs.
• Revision in classification criteria: The investment and turnover limits for MSME classification will be enhanced to 2.5 and 2 times, respectively, to help them achieve higher efficiencies and better access to capital.
• Enhanced credit availability: The credit guarantee cover will be enhanced significantly:
o For micro and small enterprises, from Rs5 crore to Rs10 crore.
o For start-ups, from Rs10 crore to Rs20 crore, with a moderated guarantee fee for loans in 27 focus sectors.
o For well-run exporter MSMEs, for term loans up to Rs20 crore.
• Credit cards for micro enterprises: Customised credit cards with an Rs5 lakh limit will be introduced for micro-enterprises registered on the Udyam portal. In the first year, 1mn such cards will be issued.
• Fund of Funds for Start-ups: Start-ups have attracted over Rs91,000 crore in investments through alternate investment funds (AIFs), supported by the government's Rs10,000 crore fund of funds. An additional Rs10,000 crore will be allocated to a new, broader fund of funds.
• Scheme for first-time entrepreneurs: A scheme will be launched for women, scheduled castes and scheduled tribes first-time entrepreneurs, providing term loans up to Rs2 crore.
• Measures for labour-intensive sectors: The government will undertake specific policy and facilitation measures to promote employment and entrepreneurship.
• Focus product scheme for footwear & leather sectors: This scheme will provide support for design capabilities, component manufacturing and machinery needed for producing high-quality non-leather footwear, in addition to supporting leather footwear and related products. It is anticipated that this initiative will create 2.2mn jobs, generate Rs4 lakh crore in turnover and lead to over Rs1.1 lakh crore in exports.
• Measures for the toy sector: A scheme will be implemented to make India a global hub for toys, focusing on cluster development, skills and a manufacturing ecosystem.
• Support for food processing: A national institute of food technology, entrepreneurship and management will be established in Bihar to boost food processing activities.
• Manufacturing mission: A national manufacturing mission will be set up to further 'Make in India' by providing policy support, execution roadmaps, governance and monitoring frameworks.
• Clean Tech Manufacturing: The mission will promote the manufacturing of clean technologies. The goal is to enhance domestic production and establish a robust ecosystem for key components such as solar photovoltaic cells, electric vehicle batteries, motors and controllers, electrolysers, wind turbines, high-voltage transmission equipment and large-scale battery storage.
3. Investment as the Third Engine: Focus on People, Economy and Innovation
• Saksham Anganwadi and Poshan 2.0: This program provides nutritional support to children, pregnant women and lactating mothers. The cost norms for nutritional support will be enhanced.
o Atal tinkering labs: 50,000 Atal Tinkering Labs will be set up in next 5 years in government schools to foster innovation.
o Broadband connectivity: Broadband connectivity will be provided to all government secondary schools and primary health centres in rural areas.
o Bharatiya Bhasha Pustak Scheme: This scheme will provide digital Indian language books for school and higher education.
o National centres of excellence for skilling: Five national centres of excellence for skilling will be set up with global expertise and partnerships.
• Expansion of Capacity in IITs: The student population across 23 Indian Institutes of Technology (IIT) has doubled in the last decade, rising from 65,000 to 135,000. To accommodate an additional 6,500 students, the five IITs established since 2014 will receive new infrastructure. Furthermore, IIT Patna will see an expansion of its hostel and other infrastructure facilities.
• Centre of excellence in AI for education: A centre of excellence in artificial intelligence (AI) for education will be set up with a total outlay of Rs500 crore.
• Expansion of medical education: Medical education seats have increased by 130% (110,000 seats) in the past 10 years. Another 10,000 will be added next year, working towards a five-year goal of 75,000 new seats.
• Day-care cancer centres: Day-care cancer centres will be set up in all district hospitals in the next three years, with 200 centres in 2025-26.
• Strengthening urban livelihoods: A scheme for the socio-economic upliftment of urban workers will be implemented.
• PM SVANidhi: Over 6.8mn street vendors have benefited from PM SVANidhi, avoiding high-interest loans. The scheme will be improved with larger bank loans, Rs30,000-limit UPI-linked credit cards, and training
• Social security scheme for online platform workers: Ten million Gig workers will be provided with identity cards, registration on the e-Shram portal and healthcare under the PM Jan Arogya Yojana.
• Investing in the Economy:
o Public private partnership (PPP) in infrastructure: Each infrastructure ministry will create a three-year pipeline of PPP projects and states will be encouraged to do the same.
o Support to states for infrastructure: An outlay of Rs1.5 lakh crore is proposed for 50-year interest-free loans to states for capital expenditure (capex) and incentives for reforms.
o Asset monetisation plan 2025-30: A second asset monetisation plan (2025-30), building on the success of the 2021 plan, will be launched to generate Rs10 lakh crore for reinvestment in new projects. Regulatory and fiscal adjustments will be made to facilitate this plan.
o Jal Jeevan Mission (JJM): Since 2019, 150mn rural households (80% of the rural population) have gained access to clean tap water through the JJM. To achieve complete coverage, the mission will be extended to 2028 with increased funding. The focus will shift to infrastructure quality and the operation and maintenance (O&M) of rural water systems, using a participatory approach ('Jan Bhagidhari'). Formal agreements (MoUs) will be signed with states and Union Territories (UTs) to guarantee sustainable and citizen-focused water service.
o Urban sector reforms: Reforms related to governance, municipal services, urban land and planning will be incentivised.
o Urban challenge fund: An urban challenge fund of Rs1 lakh crore will be set up to implement proposals for ‘Cities as Growth Hubs’.
o Power sector reforms: Electricity distribution reforms and augmentation of intra-state transmission capacity will be incentivised.
• Nuclear energy mission for Viksit Bharat: A mission for research and development of small modular reactors will be set up. Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up.
• Shipbuilding: The shipbuilding financial assistance policy will be updated to address cost competitiveness, including the use of credit notes for shipbreaking in India to support a circular economy. Larger ships (above a certain size) will be classified as infrastructure projects. The development of shipbuilding clusters will be supported to expand the types, sizes and capacity of ships built, encompassing infrastructure improvements, skills training, and technological advancements to foster a complete shipbuilding ecosystem.
• Maritime development fund: A Maritime development fund with a corpus of Rs25,000 crore will be set up. This will have up to 49% contribution by the Government, and the balance will be mobilised from ports and private sector.
• UDAN - regional connectivity scheme: The UDAN scheme will be modified to enhance regional connectivity.
• Greenfield airport in Bihar: Greenfield airports will be facilitated in Bihar, in addition to the expansion of the Patna airport.
• Western Koshi canal project: Financial support will be provided for the Western Koshi canal ERM Project in Bihar.
• Mining sector reforms: Reforms in the mining sector will be encouraged through sharing of best practices.
• SWAMIH Fund 2: Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund 2 of Rs15,000 crore will be established to complete another 100,000 housing units.
• PM Gati Shakti data for private sector: Access to relevant data and maps from the PM Gati Shakti portal will be provided to the private sector.
• Tourism for employment-led growth: To boost tourism and create jobs, 50 top tourist spots will be developed with state partnerships. States will provide land for infrastructure and destination hotels will be classified as infrastructure. Job creation will be further supported by skills training, homestay loans, better connectivity, state incentives for destination management, and easier e-visas (possibly with fee waivers). Buddhist sites will receive special focus, continuing the emphasis on spiritual tourism.
• Medical tourism and heal in India: Medical tourism and 'Heal in India' will be promoted in partnership with the private sector.
• Investing in Innovation:
o Research, development and innovation: Rs20,000 crore has been allocated for private sector-driven R&D initiatives.
o Deep tech fund of funds: A deep tech fund of funds will be explored to catalyse the next generation of start-ups.
o PM research fellowship: In the next five years ten thousand fellowships will be provided for technological research in IITs and IISc with enhanced financial support.
o Gene bank for crops germplasm: The second gene bank with 10 lakh germplasm lines will be set up.
o National geospatial mission: A national geospatial mission will be started to develop geospatial infrastructure and data.
o Gyan Bharatam Mission: A Gyan Bharatam Mission will be undertaken for the documentation and conservation of manuscript heritage. A national digital repository of Indian knowledge systems for knowledge sharing will be set up.
4. Exports as the Fourth Engine: Promotion, Infrastructure and Global Integration
• Export Promotion Mission: An export promotion mission will be set up with sectoral and ministerial targets.
• BharatTradeNet: 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: Support will be provided to develop domestic manufacturing capacities for integration with global supply chains.
• National Framework for GCC: A national framework will be formulated as guidance to states for promoting Global Capability Centres (GCC) in emerging tier-2 cities.
• Warehousing facility for air cargo: The government will facilitate the upgradation of infrastructure and warehousing for air cargo.
5. Reforms as Fuel: Taxation, Financial and Regulatory Overhaul
• Tax Reforms: Over the past decade, the government has implemented numerous taxpayer-friendly reforms, including faceless assessments, a taxpayer charter, faster refunds, self-assessment for nearly all returns, and the Vivad se Vishwas scheme. The tax department remains committed to a 'trust first, scrutinise late' approach.
• Financial sector reforms and development:
o FDI in Insurance Sector: The foreign direct investment (FDI) limit for the insurance sector will be raised from 74% to 100%. This higher limit applies to companies that invest all premiums collected within India. Existing rules and conditions related to foreign investment will be reviewed and streamlined.
o Expanding services of India post payment bank: The services of India Post payment bank will be expanded in rural areas.
• Credit enhancement facility by NaBFID: National Bank for Financing Infrastructure and Development (NaBFID) will set up a ‘partial credit enhancement facility’ for corporate bonds for infrastructure.
• Grameen Credit Score: Public sector banks will develop a ‘Grameen Credit Score’ framework.
• Pension Sector: A forum will be set up for the regulatory coordination of pension products.
• KYC simplification: The revamped central know-your-customer (KYC) registry will be rolled out in 2025.
• Merger of companies: Requirements for speedy approval of company mergers will be rationalised.
• Bilateral investment treaties (BITs): The current model of BITs will be revamped to be more investor-friendly.
• Regulatory Reforms: The government is committed to ‘ease of doing business,’ and a light-touch, trust-based regulatory framework will be implemented.
o High-level committee for regulatory reforms: A high-level committee for regulatory reforms will be set up to review non-financial sector regulations.
o Investment friendliness index of states: An investment friendliness Index of States will be launched in 2025.
o FSDC Mechanism: Financial stability and development council mechanism will be set up to evaluate the impact of financial regulations.
o Jan Vishwas Bill 2.0: The Jan Vishwas Bill 2.0 will decriminalise more provisions in various laws.
6. Fiscal Policy: Consolidation and Commitment To Reducing Debt
• Fiscal consolidation: The government reaffirmed its commitment to fiscal consolidation, as pledged in the July Budget. The aim is to manage the annual fiscal deficit to ensure a declining trajectory for central government debt as a percentage of GDP. The fiscal responsibility and budget management (FRBM) statement details the six-year roadmap for this objective.
• Revised Estimates 2024-25: Revised estimates for 2024-25 project total receipts (excluding borrowings) at Rs31.47 lakh crore, including Rs25.57 lakh crore in net tax receipts. Total expenditure is estimated at Rs47.16 lakh crore, with capex of approximately Rs10.18 lakh crore. The fiscal deficit is projected to be 4.8% of GDP.
• Budget Estimates 2025-26: For 2025-26, Budget estimates project total receipts (excluding borrowings) at Rs34.96 lakh crore and total expenditure at Rs50.65 lakh crore. Net tax receipts are estimated at Rs28.37 lakh crore. The fiscal deficit is projected to be 4.4% of GDP. Net market borrowings from dated securities to finance the deficit are estimated at Rs11.54 lakh crore, with the remainder coming from small savings and other sources. Gross market borrowings are estimated at Rs14.82 lakh crore.
