A Beginner's Guide to India's Union Budget 2025

The Union Budget is one of the most anticipated financial events in India, shaping the country’s economic policies for the upcoming fiscal year. Presented by the Finance Minister of India, it outlines government revenues, expenditures, tax policies, and allocations for different sectors.

The Union Budget 2025 will be tabled in Parliament on February 1, 2025, by Finance Minister Nirmala Sitharaman. This budget is expected to be growth-oriented, focusing on infrastructure, healthcare, tax reforms, sustainability, and economic recovery after global financial shifts.

For those new to budget discussions, the complex jargon can feel overwhelming. This guide simplifies key expectations from Budget 2025 and explains essential financial terms so that anyone—whether a student, professional, or homemaker—can understand how it impacts them.

To better understand the Union Budget, it's important to familiarize yourself with some common financial terms:

Fiscal Year: A one-year period used by governments for accounting and budget purposes. In India, the fiscal year runs from April 1st to March 31st of the following year.

Revenue: The income that the government earns, primarily from taxes, duties, and other sources.

Expenditure: The spending by the government on various services, infrastructure, subsidies, and other commitments.

Fiscal Deficit: Occurs when the government's total expenditure exceeds its total revenue (excluding borrowings). It indicates the total borrowing requirements of the government.

Gross Domestic Product (GDP): The total value of all goods and services produced within a country over a specific period. It serves as a comprehensive measure of a nation's overall economic activity.

Direct Taxes: Taxes that are directly paid to the government by individuals or organizations, such as income tax and corporate tax.

Indirect Taxes: Taxes collected by intermediaries (like retailers) from the consumers, such as Goods and Services Tax (GST).

Subsidy: Financial assistance provided by the government to individuals or groups to support economic activities and make goods or services affordable.

Disinvestment: The process of selling or liquidating government-owned assets or shares in public sector undertakings (PSUs) to raise funds.

Capital Expenditure: Spending by the government on acquiring or maintaining fixed assets, such as buildings, roads, and equipment, which have long-term benefits.

Understanding the Union Budget is crucial as it impacts various aspects of the economy and daily life. By familiarizing yourself with its key expectations and essential financial terminology, you can better comprehend the government's fiscal policies and their implications. As you continue to explore financial concepts, this foundational knowledge will serve as a valuable tool in navigating more complex economic discussions.