In particular, the budget highlights the government’s focus on flagship programs like the PM Surya Ghar Muft Bijli Yojana, aimed at installing 10 million solar rooftops in residential areas. This initiative saw an 80% increase in funding, bringing its allocation to Rs 200 billion for FY26. The scheme offers subsidies for solar systems, with up to Rs 78,000 available for larger installations. The budget allocation for rooftop solar installations has surged nearly three times higher than the initial FY25 estimate, reflecting the government’s drive to expand access to clean energy.

The PM-KUSUM scheme, which provides solar-powered pumps for farmers, also saw a significant funding rise, with the allocation increased to Rs 26 billion for FY26, up from Rs 15 billion in FY25. This boost is part of the government’s effort to integrate solar energy into agriculture, benefiting both farmers and the environment.

In addition, the government’s push for clean tech manufacturing through the National Manufacturing Mission is expected to promote domestic production of solar equipment, further reducing reliance on imports and supporting India’s clean energy goals.

However, the budget did leave some gaps, particularly in incentives for battery energy storage, which are crucial for balancing renewable energy supply and demand on the grid.

With these investments, India is set to accelerate its transition to a sustainable energy future, providing significant support to both residential users and the agricultural sector, while also strengthening its position as a leader in the global solar market.

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Freeland emphasized the need for Canada to retaliate strategically, saying, “Our counterpunch must be dollar-for-dollar and precisely targeted.” The proposal comes amid ongoing tensions as Trump has repeatedly referred to the US trade deficit with Canada, a nation rich in natural resources, as a subsidy.

Canada is a key export market for 36 US states, with nearly $3.6 billion Canadian (US$2.7 billion) worth of goods crossing the border each day. However, John Ries, senior associate dean at the University of British Columbia, cautioned against publicizing such a list in advance, suggesting it could provoke Trump and make it more difficult for him to back off from his tariff threats.

Freeland also pledged that, if elected, she would prevent American companies from bidding on Canadian federal procurement contracts (excluding defense). She intends to convene an international summit with leaders from Mexico, Denmark, Panama, and the EU to discuss joint responses to challenges to sovereignty and economic stability.

While some lawmakers have proposed cutting energy shipments to the US, Alberta Premier Danielle Smith opposed this idea. Former Bank of Canada governor Mark Carney, another Liberal leadership contender, also suggested cutting Quebec’s hydro exports to the US as a possible response.

Freeland’s recent resignation as finance minister led to Trudeau’s announcement that he would step down as Prime Minister once a new Liberal leader is chosen on March 9. With opposition parties vowing to bring down the minority government, a federal election is expected this spring.

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PM Modi emphasized that the budget shifts the focus from government revenue generation to boosting individual savings and encouraging public participation in economic development. He noted, “Usually, the focus of the budget is on how the government treasury will be filled, but this budget is exactly the opposite of that.” He highlighted the aim of the budget to empower citizens to contribute to the nation’s economic growth.

The Prime Minister also praised the reforms in the budget, particularly the encouragement of private sector involvement in nuclear energy. “Encouraging the private sector in nuclear energy is historic,” he remarked, recognizing the significance of nuclear energy in advancing the country’s development.

Furthermore, PM Modi acknowledged the employment-centric policies introduced in the budget, pointing out that it prioritizes job creation across various sectors. He highlighted the infrastructure status for shipbuilding, which is expected to promote large-scale construction and support the Atmanirbhar Bharat initiative.

Tourism, a sector with immense potential, also received attention. PM Modi announced plans for building hotels at 50 major tourist destinations, reinforcing the idea that tourism and hospitality will be crucial in generating employment. He concluded that by categorizing hotels under infrastructure, the budget would enhance the sector and create more job opportunities for the workforce.

Overall, the Union Budget 2025 represents a decisive step toward inclusive growth, with a particular focus on empowering individuals, boosting employment, and facilitating sustainable development across sectors.

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The BJP, which secured 303 seats in the Lok Sabha in 2019, saw its numbers drop to 240 in 2024, forcing it to rely on coalition partners to form the government for a third term. Party leaders believe this setback was due, in part, to voter apathy among the salaried middle class, which had expressed frustration over rising costs and stagnant disposable income.

A senior BJP functionary noted that while the Opposition’s “false campaign” on constitutional issues impacted the elections, middle-class discontent also played a role. “Many salaried individuals felt they had less money in hand, but under PM Modi’s leadership, this concern has now been addressed. The party has shown it listens to the people,” the leader said.

In Bihar, where elections are scheduled for later this year, the budget included multiple infrastructure and employment initiatives aimed at boosting the BJP’s coalition government with the Janata Dal (United). Though no specific schemes were introduced for Delhi due to the ongoing model code of conduct, the increased tax exemption limit of ₹12 lakh is expected to appeal to the city’s large salaried workforce.

Prime Minister Narendra Modi described the budget as a “people’s budget,” while BJP leaders emphasized that it reflected the party’s attentiveness to public sentiment. The Rashtriya Swayamsevak Sangh (RSS) and BJP’s grassroots cadres had repeatedly flagged concerns over inflation and rising costs, pushing for tax relief as a crucial step toward easing middle-class financial strain.

“In the last decade, policies focused on infrastructure, employment generation, and economic growth. However, there was growing dissatisfaction among middle-class voters, who felt overlooked in favor of schemes for the poor, youth, farmers, and women,” said a BJP leader.

A Lokniti-CSDS study in 2024 revealed that BJP’s support among middle and upper-middle-class voters declined from 38% in 2019 to 35% in 2024. This data reinforced the need for policy adjustments to win back this crucial segment of the electorate.

Union Home Minister Amit Shah echoed this sentiment, stating, “The middle class is always in PM Modi’s heart. The zero-income tax policy for incomes up to ₹12 lakh will greatly enhance their financial well-being.”

Another BJP leader highlighted the necessity of balancing welfare policies for lower-income groups with measures that benefit the middle class. “Free rations, medical care, and LPG subsidies expanded our support base, but the middle class felt neglected. While they make up 20-30% of voters, their influence is significant. The 2004 elections showed how a dissatisfied middle class could impact outcomes,” the leader said.

Organizations affiliated with the RSS played a pivotal role in shaping the budget, communicating key concerns from various labor unions, MSME groups, and farmer collectives. These groups emphasized tax simplification, gig worker insurance, expanded agricultural support, and policies promoting domestic manufacturing under Atmanirbhar Bharat.

An RSS official acknowledged the government’s responsiveness to these demands. “We conveyed the ground reality—there was a strong call for tax restructuring and middle-class benefits. It is encouraging to see these issues addressed in the budget,” he said.

As assembly elections in Delhi and Bihar approach, the BJP is betting on its middle-class tax relief measures to rebuild voter confidence and strengthen its political standing in key states. Whether this strategy translates into electoral gains remains to be seen.

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Manoj Varshney, a travel agency owner in Delhi, believes this decision will stimulate economic activity. “The middle-class will now have more disposable income, which they will likely spend on travel, shopping, and dining out. This will, in turn, boost various sectors of the economy,” he said.

Beyond financial implications, political analysts suggest that this tax relief could influence the upcoming Delhi assembly elections. The BJP has historically been the preferred choice of the middle-class, and this budget announcement may reinforce that loyalty. Some believe it will also encourage higher voter turnout among Gen Z and millennials, who form a significant part of this demographic.

Delhi has one of the highest concentrations of taxpayers in the country, and according to data from the Periodic Labour Force Survey (PLFS), it also has a substantial proportion of salaried workers. This makes the budget’s tax relief particularly relevant for the city. Political experts argue that while this move could help BJP consolidate its support among the middle-class, it may not drastically alter the overall electoral outcome, as lower-income groups remain a major voting bloc in Delhi.

BS Vohra, president of the East Delhi RWAs Joint Front, emphasized the widespread impact of the tax relief. “Even households earning above ₹12 lakh will feel the effect because nearly every family has at least one member in this bracket. The additional income will provide financial breathing room for many families,” he said.

The budget announcement has also shifted the focus of the Delhi elections, which had been largely dominated by debates on welfare schemes and free services. With elections scheduled for February 5, the Aam Aadmi Party (AAP) is seeking a third consecutive term, while the BJP is hoping to capitalize on voter dissatisfaction with the current administration. The Congress, aiming to regain relevance after poor performances in the last two assembly elections, has yet to make significant inroads.

Praffulit Bisht, an assistant professor at Miranda House, believes the tax announcement could reshape public perception. “There has been a sentiment that the Centre has ignored the middle-class for too long. This budget shows that their concerns are finally being addressed,” he said.

Ashwini Marwah, general secretary of the Lajpat Nagar Traders’ Association, noted that middle-class voters have traditionally been overlooked in the race for votes. “This budget sends a clear message that the government values the middle-class, not just in Delhi but across India. However, whether this translates into electoral gains for the BJP remains to be seen,” he said.

Alka Kapoor, principal of Modern Public School in Shalimar Bagh, echoed similar sentiments. “For too long, the middle-class has been neglected in policymaking. Any move that eases our financial burden is welcome. This tax relief will benefit not just individuals but entire families,” she said.

Delhi BJP chief Virendra Sachdeva praised the budget, stating that it aligns with the aspirations of salaried professionals and young urban workers. “By increasing the income tax relief limit to ₹12 lakh, the Modi government has empowered the middle-class like never before,” he said.

A senior BJP leader, speaking on condition of anonymity, noted that the party already has a strong presence among the middle and upper-income groups. “This budget further strengthens our position. Along with the upcoming eighth pay commission, these measures will help us consolidate our base,” he said.

The Aam Aadmi Party, which had earlier advocated for a tax rebate up to ₹10 lakh, argued that the budget did not go far enough. AAP leader Sanjay Singh questioned the lack of relief for small business owners. “This budget favors salaried individuals, but what about small and medium business owners? Where is their relief?” he asked.

Political analyst Sajjan Kumar Singh of PRACCIS highlighted the economic divide in Delhi’s electorate. “The middle-class has always leaned towards the BJP, and this budget will likely reinforce that trend. However, Delhi’s largest voting bloc consists of lower-middle-class and working-class voters. While the BJP may gain in vote share, achieving a clear majority could still be a challenge,” he said.

As Delhi prepares for the upcoming elections, the tax relief announced in the budget is likely to remain a major talking point. Whether it translates into electoral gains for the BJP or simply reinforces existing loyalties remains to be seen.

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Shivam Thakral, CEO of BuyUcoin, appreciated the move to streamline TDS rates, stating that it could enhance clarity and compliance for Web3 businesses. However, he urged the government to establish a committee to review business regulations and create a more startup-friendly ecosystem. He emphasized the need for clear guidelines to encourage domestic and foreign investments in digital assets.

The Bharat Web3 Association (BWA) acknowledged the government’s continued focus on digital transformation but expressed disappointment over the unchanged VDA taxation framework. “Despite data-backed justifications, the government has not introduced changes to the existing tax structure, which affects industry growth and investor participation,” said BWA Chairman Dilip Chenoy.

Avinash Shekhar, Co-Founder & CEO at Pi42, noted that while the budget emphasizes technological advancements, the absence of direction for VDAs has left the crypto ecosystem feeling overlooked. He highlighted concerns over India’s high 30% tax on crypto gains and 1% TDS, which continue to push Indian investors and tech talent toward crypto-friendly nations like Singapore and Dubai.

Ashish Singhal, Co-founder of PeepalCo, pointed out both positives and negatives in the budget. He welcomed the government’s decision to mandate reporting of crypto transactions, which he sees as a step toward regulatory clarity. However, he criticized the continued heavy taxation on crypto trades, making trading in India expensive.

Sumit Gupta, Co-founder of CoinDCX, expressed concern over the lack of parity in tax treatment between Indian and international crypto exchanges. He urged the government to enforce the same TDS obligations on offshore exchanges to ensure fair competition for compliant Virtual Asset Service Providers (VASPs) operating in India.

While the budget introduces minor steps toward regulatory clarity, the Web3 and crypto industries continue to seek comprehensive reforms, including lower tax rates and well-defined regulations to foster innovation and investment in India’s growing digital asset ecosystem.

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A major step towards strengthening domestic manufacturing is the extension of full exemptions on 25 critical minerals, including cobalt and lithium-ion battery waste. This move is expected to lower input costs for manufacturers and foster growth in mining and processing industries. Additionally, the budget proposes exemptions on 35 capital goods used in EV and mobile battery production to reduce reliance on imports and enhance India’s position as a global battery hub.

Shailesh Chandra, President of SIAM, emphasized that the focus on clean tech manufacturing, including batteries and motors, will significantly benefit India’s growing EV ecosystem. Jyoti Malhotra from Volvo Car India echoed this, highlighting the government’s support for battery manufacturing, recycling, and charging infrastructure as key to driving EV adoption.

To further promote sustainable growth, the government introduced a National Manufacturing Mission for Clean Tech, targeting EV components, solar cells, wind turbines, and green hydrogen electrolyzers. This initiative aims to secure India’s place in the global clean energy market.

The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme has also been extended to provide ongoing incentives, particularly for two-wheelers and commercial vehicles. Public-private partnerships will be encouraged to expand charging infrastructure and boost EV adoption.

In addition to boosting domestic manufacturing, the budget cuts import duties on premium motorcycles and cars, making high-end vehicles more affordable. Import duties on motorcycles above 1600cc and CBU cars have been reduced, attracting foreign investments in the luxury vehicle market.

The budget also introduced initiatives to foster electronics and semiconductor manufacturing, with a focus on enhancing domestic production of automotive electronics. Customs duty on interactive flat panel displays has been increased, while duty on LCD and LED TV open cells has been reduced to support local manufacturing.

Exports were another key focus, with an Export Promotion Mission aimed at integrating India’s manufacturing sector with global supply chains. This initiative will be supported by a Digital Public Infrastructure for International Trade and a framework for promoting Global Capability Centers (GCCs) in Tier-2 cities.

Dheeraj Hinduja from Ashok Leyland noted that continued investments in infrastructure and green mobility would fuel long-term economic growth. The budget’s focus on skilling, digitisation, and renewable energy ensures a holistic approach to India’s economic development.

In summary, the Union Budget 2025-26 lays a solid foundation for India’s automotive sector, prioritising EV adoption, clean technology, and manufacturing localisation. These measures, along with export growth and power sector reforms, will support a self-reliant and globally competitive automotive industry in the years to come.

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A standout initiative is the development of 50 key tourist destinations across the country, in collaboration with state governments. These destinations will receive necessary infrastructure upgrades, including hotels, as part of a comprehensive infrastructure development plan. States will play a pivotal role in providing land for these projects, with the goal of long-term sustainability through public-private partnerships.

The budget also introduces skill development programs, particularly in the hospitality sector, aimed at empowering youth through specialized training at institutes of hospitality management. Performance-based incentives will reward states that excel in tourism management, focusing on cleanliness, facilities, and promotional efforts.

To further improve accessibility, Sitharaman announced the simplification of e-visa processes, including visa fee waivers for specific tourist groups. Additionally, there will be a heightened focus on spiritual tourism, with special emphasis on destinations connected to the life of Lord Buddha.

Tourism industry leaders have lauded these measures, recognizing them as transformative for India’s tourism sector. Vishal Suri from SOTC Travel praised the infrastructure developments and the potential for boosting international travel. Karan Agarwal from Cox & Kings expressed excitement over the focus on spiritual and medical tourism, while Rama Mahendru from Intrepid Travel highlighted the importance of regional accessibility through the UDAN scheme.

The Mudra Loan initiative, which supports local businesses and homestays, has also garnered praise, with Kush Kapoor from Roseate Hotels emphasizing its potential to create grassroots-level entrepreneurship. Pranav Dangi from The Hosteller and Dharamveer Singh Chouhan from Zostel both emphasized the regional focus, aiming to highlight India’s hidden gems and promote sustainable tourism.

The government’s focus on medical and wellness tourism was noted by Ashish Sidhra from Alike.io, who sees the “Heal in India” initiative as a step toward establishing India as a leading wellness destination. Rikant Pittie from EaseMyTrip and Ashwani Gandhi from Niraamaya Life also welcomed the focus on medical and wellness tourism, recognizing the significant role it will play in the country’s tourism growth.

With these initiatives, the 2025-26 Union Budget sets the stage for India’s tourism industry to thrive, offering new opportunities for local entrepreneurs, job creation, and global recognition. The push for infrastructure, connectivity, and sustainability promises a bright future for India’s tourism sector.

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He further added, “All platforms that do business in India and/or want to continue doing business in India must use correct maps.”

The criticism followed a New Year’s message on WhatsApp, owned by Meta, that displayed a map of India with inaccuracies, particularly regarding Jammu and Kashmir. After the minister’s objection, WhatsApp deleted the tweet.

WhatsApp acknowledged the error, tweeting, “Thank you, Minister, for pointing out the unintended error; we have promptly removed the stream, apologies. We will be mindful in the future.”

In June 2021, Twitter faced backlash for showing a distorted map of India and later corrected it after public criticism.

The government has reiterated that social media platforms like Twitter and Facebook operating in India must adhere to local laws and respect the constitutional rights of Indian users. Additionally, the revised IT rules impose a legal obligation on social media companies to actively prevent prohibited content and misinformation.

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The Economic Survey will be presented first in the Lok Sabha at 12 noon, followed by the Rajya Sabha at 2 PM, in line with parliamentary procedures. This document, compiled by the Economic Division of the Department of Economic Affairs under the supervision of the Chief Economic Adviser, offers a detailed review of India’s economic performance over the previous financial year (April-March 2024-25) and provides an outlook for the next fiscal year.

The Economic Survey is crucial as it not only outlines key economic indicators and trends but also sets the stage for the Union Budget, offering valuable clues about the government’s fiscal policy, potential reforms, and the budget’s broad focus areas.

The History and Significance of the Economic Survey

The Economic Survey has been an integral part of India’s budgetary process since its inception in 1950-51. Initially included as part of the Union Budget documents, the Survey was separated from the Budget in the 1960s and presented a day before the Union Budget. Over the years, it has evolved into a comprehensive and data-driven document that provides an assessment of the country’s economic health and growth prospects.

The Survey has also had a tradition of adopting central themes that highlight critical issues affecting the economy. For instance, in 2022, the theme was ‘Agile Approach’, reflecting India’s adaptive economic strategies in response to the COVID-19 pandemic. In 2023, the theme was ‘Recovery Complete’, celebrating the broad-based recovery from the pandemic’s economic shock. Last year, the 2024 Survey focused on ‘Economic Resilience’, emphasizing India’s ability to withstand external challenges like global inflation and geopolitical tensions.

This year, attention will be focused on the central theme of the Economic Survey, which could signal the government’s strategy for addressing weaker GDP growth and consumption concerns. India’s GDP growth slowed to 5.4% in the July-September quarter of 2024-25, lower than expected, with forecasts for the full year now revised to 6.4-6.6%. The Economic Survey will provide insights into how the government plans to address these economic headwinds in the upcoming Budget.

Economic Context and the Road to Budget 2025

As the Indian economy grapples with slow growth, consumption challenges, and global uncertainties, the Budget 2025 will be scrutinized for measures to revitalize growth. India’s economy had registered impressive growth rates of 8.2% in 2023-24 and 8.7% in 2021-22, but the pace has cooled down recently. The Reserve Bank of India (RBI) has downgraded its growth forecast for 2024-25 to 6.6%, while the government’s estimate is slightly more optimistic at 6.4%.

Despite these challenges, India remains one of the fastest-growing major economies. The government’s strategies and fiscal policies for sustaining this growth will be under the spotlight in the Budget, particularly in light of weak consumption data and weaker-than-expected GDP numbers.

Key Traditions: The Halwa Ceremony and Budget Session

An important tradition preceding the Budget presentation is the ‘Halwa Ceremony’. This year, the event took place on January 24, marking the beginning of the printing process for the budget documents. The ceremony is a symbolic gesture to kick-start the preparations for the Union Budget and signifies the lockdown at the Ministry of Finance, where officials involved in budget preparation are not allowed to leave the compound until the documents are presented in Parliament.

The Budget session of Parliament is scheduled to begin on January 31 and will run until April 4, 2025, with a break from February 14 to March 10. On January 31, President Droupadi Murmu will address the joint sitting of both Houses of Parliament, outlining the government’s priorities for the upcoming year. The Union Budget will then be presented by Finance Minister Nirmala Sitharaman on February 1, with a speech detailing fiscal policies, revenue, expenditure proposals, and taxation reforms.

The Road Ahead: Scrutiny and Implementation

Once presented, the Union Budget will undergo detailed debate and discussions in Parliament, with lawmakers examining its provisions and proposing amendments. After approval by both Houses, the Budget will set in motion the implementation of the government’s fiscal roadmap for 2025-26. Key measures outlined in the Budget will be vital in shaping India’s economic trajectory, particularly in the face of global uncertainties and domestic growth concerns.

For Finance Minister Nirmala Sitharaman, this will be her seventh presentation of the Union Budget, surpassing the record set by former Prime Minister Morarji Desai, who presented five full budgets and one interim budget. The Budget 2025 will also be delivered in a paperless format, continuing the digital tradition of recent years.

As the nation looks ahead to the Union Budget, all eyes will be on the Economic Survey for clues about the government’s fiscal priorities and its vision for India’s economic future. The next few days will be crucial as the Survey and Budget presentations unfold, offering a glimpse into the economic direction for India in 2025-26.

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