Budget 2025 Views and Analysis Highlights: ‘Big boost for middle class’, FE Editors decode Union Budget 2025-26

A combination of file images shows Union Finance Minister Nirmala Sitharaman with the ‘Union Budget’ in the years (L-R, top row) 2019, 2020, 2021, and 2022, and (L-R, bottom row) 2023, 2024 (Interim Budget), 2025, and Union Budget 2025-26.

The Union Cabinet of the PM Modi-led NDA government approves Union Budget 2025-26.

Piyush Goyal, who presented the interim Budget in February 2019, was the last finance minister to carry a briefcase. He brought a red one to Parliament for the occasion.

The tradition of carrying the Budget briefcase is a British legacy. The term “Budget” itself comes from the French word “bougette,” meaning leather briefcase. This tradition dates back to the 18th century, when the Chancellor of the Exchequer, or Britain’s budget chief, was asked to ‘open the budget’ while presenting his annual financial statement.

Before Sitharaman, a long-standing colonial tradition was broken during the Atal Bihari Vajpayee government when Finance Minister Yashwant Sinha presented the Budget at 11 am, instead of the traditional 5 pm time. Since then, all subsequent governments have continued to present the Budget at 11 am.

Previously, finance ministers from various governments, including her predecessors in the Modi administration—Arun Jaitley and Piyush Goyal—used the traditional Budget briefcase.

The Union Finance Minister Nirmala Sitharaman’s Budget for the fiscal year starting April 2025 (FY2025-26) will be the 14th consecutive one under the Narendra Modi government since 2014, including two interim Budgets presented ahead of the general elections in 2019 and 2024. Sitharaman was appointed Finance Minister after Modi’s re-election in 2019, and she presented her first Budget on July 5, 2019. For that occasion, she carried the Budget documents in a red cloth folder, secured with a string and marked with the national emblem.

Wearing an off-white handloom silk saree with fish-themed embroidery and a golden border, Sitharaman posed for the traditional “briefcase” photo outside her North Block office. She was joined by her team of officials before heading to meet the President.

In July 2019, Nirmala Sitharaman made history as India’s first full-time woman Finance Minister by breaking away from the colonial tradition of carrying a Budget briefcase. Instead, she chose to carry the Union Budget papers in a traditional “bahi-khata,” a symbol of India’s rich heritage.

Union Finance Minister Nirmala Sitharaman will present her eighth consecutive Budget. She will deliver the Union Budget from a digital tablet enclosed in a traditional ‘bahi-khata’ style pouch.

The Union Budget will be presented in the Lok Sabha by Union Finance Minister Nirmala Sitharaman at 11 AM. This will be her eighth consecutive Budget in the Modi 3.0 government.

The Union Budget presentation can be watched on the official website – https://www.indiabudget.gov.in/. All the previous Union Budgets, current Budget, all details can be found here.

Ahead of the Budget Session, Prime Minister Narendra Modi said, “I pray to Goddess Lakshmi to shower the poor, middle class with blessings.”

Prime Minister Narendra Modi suggested the introduction of new initiatives aimed at benefiting the poor, middle class, and women, as he outlined his government’s vision ahead of the Union Budget presentation in Parliament. In his usual pre-session address to the media, Modi invoked Lakshmi, the goddess of wealth and prosperity, expressing his hopes for special blessings for the underprivileged and middle-class citizens.

There is growing speculation about possible changes to corporate tax rates in Budget 2025. The government may introduce measures to incentivize domestic companies to reinvest in the economy, which could include tax breaks for businesses that expand their operations or invest in job creation. Experts are also hoping for some simplification in the compliance process for corporations, making it easier to do business in India. Any corporate tax changes could have a significant impact on the business environment.

Union Finance Minister Nirmala Sitharaman, accompanied by Minister of State for Finance Pankaj Chaudhary, arrived at the Rashtrapati Bhavan to meet President Droupadi Murmu. This meeting comes ahead of the tabling of the Union Budget 2025 in Parliament. The customary pre-budget meeting with the President is an important step before presenting the annual financial plan for the country. Sitharaman and Chaudhary’s visit marks the final preparations for the upcoming budget, which is expected to outline the government’s financial priorities and policy direction for the fiscal year. The budget presentation is set for later today in the Lok Sabha.

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#watch | Delhi | Union Finance Minister Nirmala Sitharaman and MoS Finance Pankaj Chaudhary arrive at the Rashtrapati Bhavan to meet President Droupadi Murmu ahead of tabling #unionbudget2025 pic.twitter.com/zU16VQPTYQ

— ANI (@ANI) February 1, 2025

Union Finance Minister Nirmala Sitharaman has chosen to wear a white saree as a tribute to Madhubani Art and the craftsmanship of Padma Shri awardee Dulari Devi.

Dulari Devi, honored with the Padma Shri in 2021, met the Finance Minister during a credit outreach event at the Mithila Art Institute in Madhubani. During their meeting, they engaged in a warm conversation about the rich tradition of Madhubani art in Bihar. Dulari Devi gifted the saree to FM Sitharaman and requested that she wear it on Budget Day, a gesture she honored with pride.

The upcoming Budget is expected to focus on improving credit accessibility and offering additional incentives and subsidies for micro, small, and medium enterprises (MSMEs). These measures are aimed at strengthening the sector, with renewed attention on the employment-linked incentive scheme introduced in the FY25 Budget but not yet fully implemented. This scheme is critical for boosting employment in MSMEs, many of which have yet to recover their pre-pandemic workforce levels. Additionally, as MSMEs account for about 45% of India’s total exports, the Budget is likely to include further support for export-driven MSMEs to enhance their global competitiveness.

Capital gains tax has been a topic of discussion in recent years, particularly after changes to indexation in the previous budget. Budget 2025 is expected to rationalise the capital gains tax further, aiming for a more uniform and predictable taxation structure. Investors are looking for clarity on long-term capital gains and short-term capital gains tax rates, and any changes could significantly impact the stock market and real estate sectors. A simplification of the capital gains tax regime could encourage more investment in these sectors.

Congress leader Sandeep Dikshit commented on the Union Budget 2025, stating, that he has no expectations from this budget. He added that the Modi government has been presenting budgets for last 10-11 years with little impact. He said that he is more interested in seeing how they provide relief to their allies and large capitalists. Dikshit remarked that with the elections coming up in Delhi, the current government may attempt to win over people with promises.

Speaking to ANI, A resident of Ayodhya expressed hopes for job opportunities for the youth, lower inflation, improved security for women, and no increase in taxes on essential goods. As goldsmiths and small workers, they also wished for some relief in the excise duty and GST on gold.

Copies of the Union Budget 2025 have been brought to Parliament as Union Finance Minister Nirmala Sitharaman prepares to present her 8th Union Budget. Today, she will table the budget for the fiscal year 2025-26 in the Lok Sabha. This highly anticipated budget will outline the government’s financial priorities, including proposed reforms, allocation of resources, and plans for economic growth and development in the coming year. As always, it is expected to be a key moment in shaping the country’s fiscal policy and economic direction for the upcoming year.

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#watch | Delhi | Copies of #unionbudget2025 are brought to parliament as Union Finance minister Nirmala Sitharaman will today table her 8th Union Budget, for the fiscal year 2025-26, in Lok Sabha pic.twitter.com/AKWZQYTExW

— ANI (@ANI) February 1, 2025

Finance Minister Nirmala Sitharaman showcased the digital ‘bahi khata’ to the media ahead of her Union Budget speech. The ‘bahi Khata’ was covered in a red bag. The FM has left from the Ministry of Finance.

Modi 3.0 government has been keen on expanding the railway infrastructure in India. The budget 2025 is expected to announce rolling out of more Vande Bharat trains. The focus is also on Amrit Bharat stations’ redevelopment and improved passenger amenities.

The budget allocation for Indian Railways plays a pivotal role in transforming the network into a world-class system capable of meeting growing demand and supporting India‘s economic expansion. Around 40% of the capital expenditure for Indian Railways is financed through central government budgetary allocations, highlighting the significance of these funds in revitalizing the sector. This year’s budget is highly anticipated, with strong expectations for enhanced funding aimed at modernization, safety improvements, and the expansion of railway infrastructure.

While the government has made significant strides with the New Tax Regime, it is highly unlikely that the Old Tax Regime will be scrapped in Budget 2025. Many taxpayers, especially those with higher deductions, still prefer the Old Regime. Reports suggest that the government will continue to maintain both tax systems, allowing taxpayers to choose the one that best suits their needs. This flexibility is expected to remain a feature of India’s tax system for the foreseeable future.

Finance Sitharaman is wearing a white saree as she preps to deliver her eighth consecutive Union Budget speech today. The FM has already arrived at the Ministry of Finance. Stay with us to know all about the ‘Bahi Khata’.

Finance Minister Nirmala Sitharaman has arrived at the Finance Ministry. She will be presenting the Union Budget 2025 speech in some time. Tune in with Financial Express Online to get constant live coverage on Budget 2025 announcements.

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#watch | Delhi: Union Finance Minister Nirmala Sitharaman arrives at the Ministry of Finance. She will present #unionbudget2025 at the Parliament today. pic.twitter.com/T59lxfo5YT

— ANI (@ANI) February 1, 2025

Chief Economic Advisor Dr V. Anantha Nageswaran has arrived at the Ministry of Finance. Union Finance Minister Nirmala Sitharaman will be delivering the Budget 2025 speech in a few hours. Stay with us for further updates.

Finance Minister Nirmala Sitharaman has left from her residence in New Delhi and is on her way to the Parliament. She is set to present the Union Budget 2025 at 11:00 AM today.