Union Budget 2025: Major Tax Relief and Spending Plan

India's Union Budget 2025-2026, presented by Finance Minister Nirmala Sitharaman, introduced significant changes to the income tax slabs, offering relief to the middle class by eliminating taxes for those earning up to ₹12 lakh annually. The revised tax structure includes reduced rates for higher income brackets, expected to increase middle-class spending and stimulate economic growth. To offset an estimated ₹1 trillion revenue loss, the government plans to increase capital spending and leverage central bank transfers. This strategy aims to narrow the budget deficit to 4.4% of GDP while supporting infrastructure development and boosting sectors like MSMEs, agriculture, and healthcare. The budget's focus on consumption and private investment is seen as a response to India's slowest economic growth in four years, with a target growth rate of over 6% for the next fiscal year. Analysts expect the budget measures to positively impact stocks in FMCG, auto, and healthcare sectors.