Summary of Union Budget 2025-26

Summary of Union Budget 2025-26 

Key Highlights and Sectoral Impact: 

The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, focuses on "Sabka Vikas" (Inclusive Growth) with emphasis on four major growth engines: Agriculture, MSMEs, Investment, and Exports. The budget introduces fiscal consolidation measures, tax reforms, industrial development, and incentives for economic expansion.

---

1. GDP Growth Estimate

• Fiscal Deficit: Estimated at 4.8% of GDP in FY-25, with a target reduction to 4.4% in FY-26.

• Investment in Infrastructure: ₹1.5 lakh crore in interest-free loans to states for capital expenditure.

• Public-Private Partnerships (PPP): A new 3-year project pipeline, increasing private-sector involvement.

• Urban Development: ₹1 lakh crore allocated for Urban Challenge Fund, promoting cities as economic hubs.

• Tax Benefits to the Middle Class: Increased disposable income through higher tax exemptions, leading to higher consumption.

👉 Overall, the budget is pro-growth and positive for GDP expansion, supported by investments in infrastructure, private-sector participation, and increased domestic demand. However, the impact will depend on execution efficiency.

---

2. Impact on Different Industries

Industry	Impact
Agriculture	✅ Positive: ₹5 lakh loan limit under KCC, higher procurement of pulses, new productivity missions.
MSMEs	✅ Positive: Credit guarantee limit doubled to ₹10 crore, new manufacturing missions, better access to financing.
Banking & Finance	✅ Positive: Expansion of FDI in insurance from 74% to 100%, leading to new foreign investments in the sector.
Infrastructure	✅ Positive: ₹1.5 lakh crore for capex, PPP model expansion.
Real Estate	✅ Positive: ₹15,000 crore SWAMIH fund for completing 1 lakh stressed housing units.
IT & AI	✅ Positive: ₹500 crore for AI-based education research, digital infrastructure development.
Renewable Energy	✅ Positive: ₹20,000 crore for nuclear energy R&D, new incentives for battery production.
Automobile (EVs)	✅ Positive: Additional capital goods exemption for EV battery manufacturing.
Healthcare & Pharma	✅ Positive: Basic Customs Duty (BCD) exempted on 36 life-saving drugs and medicines.
Shipbuilding & Maritime	✅ Positive: BCD exempted for 10 years on raw materials & components used for shipbuilding, promoting domestic production and reducing costs.
Fisheries & Seafood Exports	✅ Positive: BCD reduced from 30% to 5% on frozen fish paste and from 15% to 5% on fish hydrolysate, benefiting seafood exporters and reducing production costs.
Telecom & Electronics	⚠️ Mixed: Higher BCD on interactive displays (20%), but lower for open cells (5%).
Textile	✅ Positive: Incentives for domestic textile production, shuttle-less looms added to exemption list.
FMCG & Consumption	✅ Positive: Higher middle-class disposable income expected to boost consumption.
Exports	✅ Positive: New Export Promotion Mission, BharatTradeNet digital infrastructure for trade facilitation.

---

3. Impact on Listed Companies (Including Additional Policies)

Likely Beneficiaries

Sector	Companies Likely to Benefit	Reason
Banking & Finance	HDFC Bank, SBI, ICICI Bank	Higher credit demand from MSMEs, homebuyers, and foreign investment in insurance.
Insurance	HDFC Life, ICICI Lombard, SBI Life	FDI in insurance raised from 74% to 100%, bringing foreign capital inflow.
Real Estate	DLF, Godrej Properties	₹15,000 crore SWAMIH fund for stressed housing.
Infrastructure	Larsen & Toubro, IRB Infra	Increased government spending on infrastructure projects.
EV & Battery Manufacturing	Tata Motors, Exide, Amara Raja	Exemptions on capital goods for EV battery manufacturing.
Renewable Energy	NTPC, Adani Green, IREDA	₹20,000 crore investment in nuclear and alternative energy.
Shipbuilding & Maritime	Cochin Shipyard, Mazagon Dock	10-year BCD exemption on raw materials, reducing costs and boosting industry growth.
Seafood & Fisheries	Avanti Feeds, Waterbase Ltd	Reduction in BCD on frozen fish paste and fish hydrolysate, making exports more competitive.
Telecom & Electronics	Reliance Jio, Bharti Airtel	Government push for digital transformation.
IT & AI	TCS, Infosys, Wipro	₹500 crore AI education initiative, growth in skilling programs.
Healthcare & Pharma	Sun Pharma, Cipla, Divislab	BCD exemptions on life-saving drugs, improving affordability and profits.

Potentially Negatively Affected Companies

Sector	Companies Potentially Affected	Reason
Consumer Electronics	Dixon Technologies, Samsung India	Increased BCD on interactive displays (20%).
Import-Heavy Companies	Companies dependent on foreign raw materials	Higher customs duties on select imported components.

---

Final Takeaways

✅ GDP Growth Outlook: Positive, due to fiscal stimulus, increased private-sector participation, and middle-class tax benefits.
✅ Boost to Key Sectors: Agriculture, MSMEs, Infrastructure, Insurance, Shipbuilding, Fisheries, and Renewable Energy.
⚠️ Potential Risks: Execution challenges, impact of higher duties on certain industries.

---