One of the budget’s most significant highlights is the overhaul of the personal income tax regime. The tax-free income threshold has been raised to ₹12 lakh, a move that entails revenue forgone of ₹1 lakh crore. This decision is expected to put more money into the hands of the middle class, driving demand across sectors such as consumer goods, real estate and automobiles.Fiscal Prudence and Stability
Despite increased spending, the budget maintains a strong commitme nt to fiscal consolidation. The fiscal deficit is projected to decline to 4.4% of GDP in FY26 from 4.8% in the revised estimates for FY25. A balanced approach between revenue augmentation and expenditure rationalisation ensures that India remains on a sustainable growth path without jeopardising macroeconomic stability.
Boosting Labour Intensive Sectors
The budget introduces a Focus Product Scheme for the footwear and leather sector, which is expected to generate 22 lakh jobs and enhance exports. The toy sector will receive support through cluster development, skill enhancement and incentives for manufacturing. Tourism has been given special attention, with plans to develop the top 50 tourist sites in partnership with states, an improved e-visa regime, targeted skill development and Mudra loans for homestays.
Continued Thrust on Infrastructure
Public-private partnerships (PPPs) are being rekindled, with each ministry tasked with creating a pipeline of projects for the next three years. A ₹10 lakh crore Asset Monetisation Plan (2025-30) has been announced to fund new infrastructure projects. The Urban Challenge Fund of ₹ 1 lakh crore will help redevelop cities and strengthen municipal governance, making urban areas more liveable and investment friendly. Supporting MSMEs and Startups
Recognising the role of MSMEs in job creation and economic growth, the budget introduces several supportive measures. MSME classification criteria (investment and turnover limits) have been revised upwards by 2x to 2.5x, enabling more businesses to qualify for MSME benefits.
The budget strikes a balance between immediate economic relief and long-term structural growth. By reducing tax burdens, strengthening MSMEs, investing in infrastructure, and promoting innovation, the budget creates an enabling environment for sustained economic progress.