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Union Budget 2025 – Key Highlights 💰

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Union Budget 2025 – Key Highlights 💰

🔹 Introduction

The Union Budget is the Annual Financial Statement of the government presented under Article 112 of the Indian Constitution. It outlines the government’s revenue and expenditure for the financial year and sets economic priorities. The Finance Minister presents the budget in Parliament, detailing allocations for various sectors, taxation policies, and fiscal strategies.

The Union Budget 2025 is particularly important as India aims to sustain high economic growth, enhance infrastructure development, and strengthen social welfare programs while maintaining fiscal discipline. The budget is also expected to align with India’s $5 trillion economy goal and emphasize green energy, digital transformation, and rural empowerment.

🔹 Key Highlights of Union Budget 2025

✅ Fiscal Deficit Target 📉

  • The government aims to reduce the fiscal deficit to 4.5% of GDP by 2025, as per the Fiscal Responsibility and Budget Management (FRBM) Act.
  • Fiscal deficit is the difference between total expenditure and total revenue (excluding borrowings).

✅ Taxation Reforms 💸

  • Possible restructuring of Income Tax slabs to provide relief to middle-class taxpayers.
  • Capital Gains Tax reforms to simplify tax structures for equity and property transactions.
  • GST Rationalization 🏭 – Steps towards reducing the 4-slab system (5%, 12%, 18%, and 28%) to a 3-tier structure.

✅ Infrastructure & Investment Boost 🏗️

  • Higher allocation for PM Gati Shakti – a national master plan for multi-modal infrastructure projects.
  • Increased funding for Railways, Roads, and Airports to enhance connectivity and economic growth.
  • Public-Private Partnerships (PPP) to boost investment in Smart Cities & Urban Transport.

✅ Green Growth & Renewable Energy 🌱

  • Expansion of Green Hydrogen Mission to reduce dependency on fossil fuels.
  • Incentives for Electric Vehicles (EVs) and solar power projects.
  • National Carbon Credit Trading Framework introduced for reducing industrial emissions.

✅ Social Welfare & Rural Development 👨‍👩‍👧

  • Higher funds allocated for MGNREGA to improve rural employment opportunities.
  • Expansion of PM-KISAN scheme to include more beneficiaries.
  • Healthcare investments in Ayushman Bharat and new rural health centers.

✅ Digital India & Fintech Sector Growth 💻

  • Expansion of UPI-based digital transactions and CBDC (Central Bank Digital Currency) pilots.
  • Tax incentives for fintech startups to promote innovation in digital banking.

🔹 Prelims Focus Areas

  • Article 112 (Union Budget Presentation)
  • Fiscal Deficit & FRBM Act (2003)
  • Types of Budget – Capital & Revenue, Zero-Based Budgeting
  • Difference between Vote on Account & Interim Budget
  • Important government schemes & fund allocations

📌 MCQs on Union Budget 2025

1️⃣ Which article of the Indian Constitution mandates the presentation of the Union Budget?

A) Article 110
B) Article 112
C) Article 117
D) Article 148

Tap here for Answer
Answer: B) Article 112

Explanation:

  • Article 112 of the Indian Constitution mandates the Annual Financial Statement (Union Budget).
  • It details the government’s planned revenues, expenditures, and financial policies for the upcoming fiscal year.

2️⃣ What is the target fiscal deficit for FY 2025 as per the Budget?

A) 3.5% of GDP
B) 4.5% of GDP
C) 5.5% of GDP
D) 6.4% of GDP

Tap here for Answer
Answer: B) 4.5% of GDP

Explanation:

  • The government has set a target of reducing the fiscal deficit to 4.5% of GDP by 2025, as per the Fiscal Responsibility and Budget Management (FRBM) Act.
  • The fiscal deficit is the difference between government spending and revenue collection (excluding borrowings).

3️⃣ What is the primary objective of the PM Gati Shakti initiative highlighted in the Budget 2025?

A) To enhance employment opportunities in rural areas
B) To improve digital banking infrastructure
C) To develop a multi-modal transport network
D) To promote renewable energy investments

Tap here for Answer
Answer: C) To develop a multi-modal transport network

Explanation:

  • PM Gati Shakti is a national master plan focused on multi-modal transport connectivity.
  • It aims to reduce logistics costs, improve supply chains, and enhance infrastructure across India.

4️⃣ Which of the following new initiatives was introduced in Budget 2025 for Green Growth?

A) Expansion of Ayushman Bharat Scheme
B) Introduction of Carbon Credit Trading Framework
C) Launch of a National Pension Scheme for Informal Workers
D) Inclusion of Petroleum under GST

Tap here for Answer
Answer: B) Introduction of Carbon Credit Trading Framework

Explanation:

  • The Carbon Credit Trading Framework allows industries to trade carbon credits as part of India’s commitment to reducing carbon emissions.
  • It promotes green investments and sustainability initiatives.

5️⃣ What major taxation reform was introduced in the Union Budget 2025?

A) Introduction of a new Wealth Tax
B) Complete abolition of Corporate Tax for MSMEs
C) Simplification of Capital Gains Tax
D) Universal Basic Income (UBI) Implementation

Tap here for Answer
Answer: C) Simplification of Capital Gains Tax

Explanation:

  • The Budget introduced simplified capital gains tax rates to make taxation easier for investors.
  • This reform aims to increase transparency and promote investment in equity & real estate sectors.

🚀 Conclusion

The Union Budget 2025 is designed to strengthen economic stability, boost infrastructure, and enhance social welfare while reducing the fiscal deficit. The government’s emphasis on digital transformation, green energy, and rural development will shape India’s future growth trajectory.

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