Union Budget 2025: Key announcements and impact on consumers

February 3, 2025 Hot from the Oven Valli Sarvani

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduced significant changes in taxation, employment, and trade policies.

As the second full budget under the Modi 3.0 government, it focuses on strengthening agriculture, manufacturing, rural development, and innovation.

One of the most discussed highlights is the exemption of income tax for earnings up to ₹12 lakh under the new tax regime.

Major Budget Announcements

Revised Tax Slabs: The new tax regime eliminates income tax for individuals earning up to ₹12 lakh, providing relief to the middle class.
Capital Expenditure: The government has increased capital expenditure to ₹11.21 lakh crore for FY 2025-26, up from ₹11.11 lakh crore in the previous fiscal year.
Makhana Board: A dedicated board will be established in Bihar to enhance the production, processing, and marketing of Makhana.
Employment Generation: The government plans to create 22 lakh jobs, with a focus on improving the footwear and leather sectors.
UDAN Scheme Expansion: The revised scheme aims to connect 120 new destinations, targeting 4 crore passengers over the next decade.

Items That Became Cheaper

Several essential goods and raw materials will see reduced prices due to customs duty exemptions or reductions:

Medicines & Medical Supplies: Basic Customs Duty exemption extended to 36 cancer and rare disease drugs, along with 37 other medicines.
Fisheries & Agriculture: Custom duty on fish pasteurii was reduced from 30% to 5%, and fish hydrolysate for aquatic feed was cut from 15% to 5%.
Chemical Compounds: Pyrimidine and piperazine ring compounds now attract a lower 7.5% duty instead of 10%.
Industrial & Consumer Goods: LED, zinc, lithium-ion battery scrap, cobalt products, and 12 critical minerals are fully exempted from duty.
Handicrafts & Exports: The government announced new initiatives to promote handicraft exports.
Automobiles: Bikes up to 1600cc will now have a 40% customs duty, down from 50%, while larger bikes will see a reduction to 30%.

Items That Became Costlier

Some products will see higher prices due to increased customs duties:

Knitted Fabrics: The duty has increased to 20% or ₹115 per kg, whichever is higher.
Interactive Flat Panel Displays: The duty has been raised from 10% to 20% to correct an inverted duty structure.

Additionally, the government has introduced a two-year limit for provisional assessments, bringing more clarity to taxation policies.

The Union Budget 2025 builds on previous reforms while aiming to stimulate economic growth and improve infrastructure.

The proposed changes in taxation and trade policies will impact multiple industries, benefiting consumers and businesses alike.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on March 27, 2017