Here, we bring you the live updates of Union Budget 2025-26, presented by Nirmala Sitharaman in Lok Sabha today.
- Budget focuses on four focus areas-agricultural MSMEs, investment and exports.
- 1.7 crore farmers to benefit from enhanced credit availability.
- The Budget will focus on taxation, power sector, urban , mining, finance and regulatory reforms.
- MSMEs as a second engine which encompasses manufacturing and services with a focus on MSMEs numbering 5.7 crore. Currently over 1 crore registered MSMEs employing 7.5 crore people and generating 36% of our manufacturing have come together to position India as a global manufacturing hub.
- India Post will also be transformed into a large logistics organization. This will meet the rising needs of Vishwakarma, new entrepreneurs, women, self-help groups, MSMEs, and large business organizations.
- Our government will set up a national manufacturing mission covering small, medium and large industries to further make in India. Given our commitment to climate-friendly development, the mission will support clean tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers electrolysers, wind turbines and grid scale batteries.
- With their quality products, these MSMEs are responsible for 45% of our exports, helping them achieve higher efficiencies of scale, technological upgrades, and better access to capital. The investment and turnover limits for the classification of all MSMEs will be enhanced to 2.5 and 2 times, respectively. This will give them the confidence to grow and generate employment for our youth.
- To improve access to credit, credit guarantee coverage will be enhanced. First, for micro and small enterprises, from Rs 5 crore to 10 crore rupees, leading to an additional credit of 1.5 lakh crores in the next five years. Second, for start-ups from 10 crore rupees to 20 crore rupees, we will guarantee we will be moderated to 1% for loans in 27 focussed sectors which are important.
- For Micro Enterprises, we will introduce customised credit cards with a 5 lakh rupee limit for micro enterprises registered on OPM portal. In the first year, 10 lakh such cards will be issued.
- Furthering Make in India - Our government will set up a National Manufacturing Mission covering Small, Medium and Large Industries for furthering Make in India by providing policy support, execution roadmaps, governance, and monitoring for central ministries and states; details are in the annexure.
- Mining sector reforms including minor minerals will be encouraged via sharing of best practices. Policy for recovery of critical mineral to be introduced.
- Given our commitment to climate-friendly development, the mission will also support clean tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar photovoltaic cells, EV batteries, Motors and Controllers, Electrolyzers, Wind turbines, very High voltage transmission equipment, and grid-scale battery investment.
- Five National Centers of Excellence for Skilling may be set up with global expertise and partnerships to make a path forward with the skills required for Make for India and Make for the World. The partnership will cover curriculum design, training of trainers, a skill certification framework, and periodic reviews.
- Expansion of capacity in IITs: the total number of students in 23 IITs has increased 100 percent from 65,000 to 1.35 lakh in the past 10 years. Additional infrastructure will be created in the five IITs started after 2013 to facilitate education for 6,500 more students. Cluster and other infrastructure capacity at IIT Patna will also be expanded.
- Government announced primary centers of excellence in artificial intelligence for agriculture, health, and sustainable cities in 2023. Now, a Center of Excellence in artificial intelligence for education may be established with a total budget of Rs 300 crores.
- Gig workers on online platforms provide great benefits to the new aid services economy. Recognizing their contribution, our government will arrange their identity cards and registration on the e-Shram portal. They will also be provided with healthcare under PM Jan Arundhati Yojana. This measure is likely to assist nearly one crore gig workers, who are investing in the economy.
- Public-private partnership in infrastructure: Each infrastructure-related ministry will develop a three-year pipeline of projects that can be implemented in PPP mode. States will also be encouraged to do so and can seek support from the India Infrastructure Project Development Fund, a scheme to prepare PPP proposals.
- Development of at least 100 GW of nuclear energy by 2047 essential for our energy efforts. To actively partner with the private sector in Nuclear Energy. Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be considered.
- At least five indigenously developed small modular reactors will be operationalised by 2033.
- Support the States for infrastructure - An offering of 1.5 lakh crore for 15-year interest-free loans to states for capital expenditure and incentives for reforms is proposed.
- The government will create a model bilateral investment treaty to foster a more investment-friendly environment and encourage sustained foreign investment.
- To exempt cobalt powder, scrap of lithium, lead and 12 more critical minerals from customs duty. To add 25 additional capital equipment used for lithium-ion EV battery manufacturing to exempted capital goods list.
- Bharat Trade Net for international trade will be set up as a unified platform for trade documentation and financing solutions, which will complement the Unified Logistics Interface platform. The BTN will be aligned with international practices. Support will be provided to develop domestic manufacturing capacities for te economy's integration with global supply chains. Sectors will be identified based on objective criteria.
- A Deep Tech fund of funds will also be explored to catalyze the next-generation startups as a part of this initiative. Under the PM Research Fellowship Scheme in the next five years, we will provide 10,000 fellowships for technological research in IITs and IASC with enhanced financial support.
- We will start a National Geospatial Mission to develop the foundational Geospatial Infrastructure. This mission will facilitate the modernization of land records, urban planning, and design of infrastructure projects.
- There are huge opportunities related to Industry 4.0, which requires high skills and talent. Our government will support the domestic electronic equipment industry to leverage this opportunity to benefit our youth. A national framework will guide states in promoting global capability centers in emerging tier 2 cities.
- A high-level committee for regulatory reforms will be set up for a review of all non-financial sector regulations, certifications, licenses and permissions. The committee will be expected to make recommendations within a year.
The Union Budget is India's annual financial blueprint that steers the nation's economic direction. Beyond being a constitutional requirement, it's a powerful tool that shapes fiscal policies, development priorities, and market dynamics. Through tax policies, infrastructure spending, and sector-specific initiatives, it directly influences both business environment and citizen welfare.
For the automotive sector, particularly MSMEs, the budget holds special significance. It can transform the operating landscape through changes in GST rates, import duties on components, and incentives for electric vehicle adoption. The budget's allocation for infrastructure development, especially roads and transportation, directly impacts automotive demand. For automotive MSMEs, which form the backbone of the component manufacturing ecosystem, budget provisions for working capital support, technology upgradation funds, and easier credit access are crucial for their survival and growth.
The budget's emphasis on schemes like FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) and PLI (Production Linked Incentive) directly affects investment decisions in the auto sector. For smaller players, provisions for skill development, cluster development, and raw material cost management can mean the difference between growth and stagnation.
Through its various provisions, the Union Budget essentially sets the pace for India's economic growth while balancing fiscal discipline with development needs. For the automotive MSME sector, it can either accelerate growth through supportive policies or create challenges through regulatory changes, making it a crucial annual event that shapes their business strategies.