India aims to boost comprehensive growth and improve quality of life

The Indian government, led by Prime Minister Narendra Modi, has just unveiled its budget plan for the 2025-2026 fiscal year, highlighting key policies aimed at unlocking the development potential of the world’s fifth-largest economy. Along with comprehensive growth objectives, the Indian government prioritises resources to improve its citizens’ quality of life.

People ride rickshaws at a market place in New Delhi, India, on April 26, 2023.

The Indian economy is forecast to grow 6.3-6.8% in the 2025-2026 fiscal year. This represents India’s lowest growth rate in four years, attributed to various challenges such as stagnant manufacturing, persistent food inflation and weak consumption. India has not been immune to the headwinds affecting global growth, including geopolitical instability and unpredictable world economic outlook.

Indian officials consider the next five years crucial for achieving balanced growth across all sectors and reaching all social strata. In the face of these challenges, India must remain resolute in moving forward and take stronger action to achieve its set objectives.

These goals were emphasised by Indian Finance Minister Nirmala Sitharaman during her recent parliamentary presentation of the 2025-2026 fiscal year budget plan.

India will need nearly 584 billion USD for the upcoming fiscal year, up about 7.4% compared to 2024-2025. Consequently, the Indian Finance Ministry anticipates a budget deficit of 4.4% of GDP.

Sitharaman clarified that the budget plan aims to build upon the government’s achievements in promoting growth, ensuring comprehensive development, boosting private investment, and increasing middle-class spending in India.

The budget plan focuses resources on four key areas, namely agriculture, micro, small and medium enterprises (MSMEs), investment and exports, which are considered India’s main growth drivers for the upcoming period. Additionally, the budget allocates funds for reforms in taxation, urban development, mining, finance, and other sectors to tap into India’s growth potential and enhance the country’s competitiveness.

According to the plan, India will launch a “Rural Prosperity and Resilience” programme to improve agricultural productivity, enhance irrigation infrastructure and address unemployment. India continues implementing credit programmes to facilitate short-term loans for millions of farmers and fishermen. MSMEs, accounting for 45% of India’s export value, are also viewed as development drivers. Therefore, India will revise MSME classification criteria, enabling easier capital access and technology upgrades. As manufacturing’s share in the economy remains below target, the Indian government continues to promote the “Make in India” initiative.

Investment in people and innovation are also growth drivers. Measures to support the poor, farmers, youth, and women, have been incorporated into the budget plan. India also promotes support for general education and specialised fields such as healthcare, technology, and artificial intelligence.

Approximately one-third of India’s 1.4 billion population is considered middle class. Thus, India will introduce new income tax rates, reducing taxes for the middle class to encourage household savings, consumption and investment. Additionally, India is increasing investment in various sectors including energy, maritime industry, tourism and innovation.

In announcing the budget plan, the Indian government reaffirmed its commitment to realising the goal of making India a developed nation by 2047, marking the centenary of its independence.

Prime Minister Modi affirmed that the budget plan not only meets current needs but also prepares for the future. He expressed confidence that Indians will unite in the country’s development journey.

NDO