On March 25, 2025, the Lok Sabha passed the Finance Bill 2025, which included 35 amendments proposed by the government. One of the most notable changes is the elimination of the six percent digital tax on online advertisements. This marks the end of the Budgetary approval process in the Lower House. Next, the bill will be sent to the Rajya Sabha for additional consideration, and once that’s done, the Budget process for FY 2025-26 will be officially completed.
Finance Bill 2025 and Budgetary Overview
In the Union Budget for 2025-26, the total expenditure is set at ₹50.65 lakh crore, showing a 7.4 percent increase from FY 2024-25. The government has earmarked ₹11.22 lakh crore for capital expenditure, which, when you consider effective capital spending, rises to ₹15.48 lakh crore. The expected gross tax revenue is projected to be ₹42.70 lakh crore, with gross borrowing estimated at ₹14.01 lakh crore.
Key Announcements in Finance Bill 2025
According to Finance Minister Nirmala Sitharaman, the Finance Bill 2025 is designed to support India’s vision for Viksit Bharat by 2047 and to ensure clarity in taxation. She highlighted a few important goals:
– Simplifying tax regulations to improve the business environment.
– Offering unprecedented tax relief for individuals and companies.
– A strong commitment to increasing tax revenue from individuals with assets abroad.
As per the budget documents, the allocation for Centrally Sponsored Schemes in FY 2025-26 stands at ₹5,41,850.21 crore, marking a notable rise from ₹4,15,356.25 crore in FY 2024-25. Likewise, Central Sector Schemes are set to receive ₹16.29 lakh crore, compared to ₹15.13 lakh crore in the previous year.
State Allocations and Fiscal Deficit
For the Budget of 2025-26, the total resource transfer to states—including state share devolution, grants, loans, and Centrally Sponsored Schemes—totals ₹25,01,284 crore. This represents an increase of ₹4,91,668 crore compared to the actual figures from 2023-24.
The fiscal deficit for FY 2025-26 is anticipated to be 4.4 percent of GDP, a decrease from the current fiscal’s 4.8 percent. Furthermore, the GDP for FY 2025-26 is estimated at ₹3,56,97,923 crore, reflecting a 10.1 percent growth over the Revised Estimates for FY 2024-25 (which were ₹3,24,11,406 crore) as released by the National Statistical Office (NSO).
