1 February 2025

• Budget day: Finance Minister Nirmala Sitharaman presented Union Budget 2025-26. No income tax for earnings up to 12 lakh rupees under the new regime.
• Economic Survey: GDP growth pegged at 6.4 per cent for FY25; projected 6.3 to 6.8 per cent for FY26. Gross NPAs at a 12-year low of 2.6 per cent.
• Wetlands: Four new Ramsar sites added. India's total rises to 89. Tamil Nadu leads all states with 20 sites.
• Space: Kara Sea in the news for its strategic role in the Northern Sea Route through the Arctic.

GS area: Economy

Finance Minister Sitharaman presented the eighth consecutive Budget of this government. The headline fiscal consolidation number is a deficit of 4.4 per cent of GDP. Total expenditure is estimated at 50.65 lakh crore rupees. Capital expenditure stands at 11.21 lakh crore rupees. That is 3.1 per cent of GDP and a 10 per cent increase over the revised estimate for FY 2024-25.

Key allocations:

• Railways: 2.3 lakh crore rupees for the year.
• Expressways: 1.3 lakh crore rupees.
• Nuclear Energy Mission: 20,000 crore rupees earmarked for Small Modular Reactors.
• Jobs target: 22 lakh new positions across the economy.
• Income tax relief: No tax liability for individuals earning up to 12 lakh rupees under the new regime. Salaried persons get an effective ceiling of 12.75 lakh with the standard deduction of 75,000 rupees.

The fiscal deficit path targets further consolidation. Total receipts other than borrowings are estimated at 34.96 lakh crore rupees.

Static linkage: Indian economy (budget, fiscal policy).

GS area: Economy (agriculture), Government schemes

The Budget announced a new agricultural scheme covering 100 low-productivity districts:

• Targets: 1.7 crore farmers in underperforming districts.
• Focus areas: Crop diversification, post-harvest storage infrastructure, irrigation expansion, agricultural credit access.
• Allocation breakdown: 1,000 crore rupees for pulses, 500 crore rupees for fruits and vegetables, 100 crore rupees for hybrid seeds.
• Target groups: Small and marginal farmers, rural women and landless families.
• Kisan Credit Card limit: Raised to 5 lakh rupees from the earlier 3 lakh rupees.

The scheme addresses the persistent gap between high-potential and low-productivity agricultural districts. It is implemented through the Ministry of Agriculture and Farmers Welfare.

Static linkage: Agriculture (Indian economy).

GS area: Economy (financial sector)

The Budget raised the foreign direct investment limit in insurance from 74 per cent to 100 per cent. The condition: all premiums collected must be invested within India. Key sector facts:

• India's current ranking: Tenth largest insurance market globally.
• Projection: Expected to reach sixth place by 2033.
• Market value: Projected at 222 billion US dollars by 2026.
• Insurance density (2023-24): 95 US dollars per capita.

The Dinesh Khara Committee under IRDAI was tasked with reviewing feasibility of 100 per cent FDI and composite insurance companies. IRDAI is the Insurance Regulatory and Development Authority of India, established in 1999 and headquartered in Hyderabad.

Static linkage: Financial sector regulation (Indian economy).

GS area: Economy

The Economic Survey was tabled a day before the Budget. Numbers that prelims examiners reach for:

• Real GDP growth FY25: 6.4 per cent.
• Projected FY26: 6.3 to 6.8 per cent.
• Retail inflation April to December 2024: 4.9 per cent headline; food inflation 8.4 per cent.
• Unemployment rate 2023-24: 3.2 per cent.
• Agriculture growth FY25: 3.8 per cent.
• Services exports April to November 2024: 12.8 per cent surge.
• Forex reserves January 2025: 634.6 billion US dollars.
• Gross NPAs: 2.6 per cent (a 12-year low).
• Capital adequacy ratio for banks (CRAR) September 2024: 16.7 per cent.
• Renewable energy capacity increase to December 2024: 15.8 per cent.

The Survey cautioned against excessive financialisation: growing dominance of financial markets over the real economy raises inequality and over-dependence on asset prices.

Static linkage: Indian economy (macro indicators).

GS area: Environment (biodiversity)

India added four wetlands to the Ramsar list. The total stands at 89. Each new site carries testable location details:

• Therthangal Bird Sanctuary: Tamil Nadu. Area 29.29 hectares. Notified December 2010.
• Sakkarakottai Bird Sanctuary: Tamil Nadu. Area 230.49 hectares. Notified April 2012.
• Khecheopalri Wetland: Sikkim. A sacred Buddhist and Hindu site noted for a unique behavior: birds remove fallen leaves from the surface before they can sink.
• Udhwa Lake: Jharkhand. Comprises Pataura Jheel (155 hectares) and Brahma Jamalpur Jheel (410 hectares). Notified 1991.

Tamil Nadu now leads all states with 20 Ramsar sites. Sikkim and Jharkhand each added their first site ever.

Static linkage: Biodiversity (environment and ecology).

GS area: Culture, Government schemes

The Budget increased the National Mission for Manuscripts allocation from 3.5 crore to 60 crore rupees. The renamed Gyan Bharatam Mission targets the survey, conservation and digitisation of approximately 10 million manuscripts held across India in private and institutional collections. The Ministry of Culture administers the mission.

India holds one of the world's largest repositories of manuscripts covering science, philosophy, medicine and arts written across multiple scripts and languages.

Static linkage: Cultural heritage (art and culture).

GS area: Science and Technology (defence)

The Budget supported indigenous defence manufacturing. DRDO's Research Centre Imarat in Hyderabad developed the Very Short Range Air Defence System (VSHORADS), a man-portable air defence system:

• Weight: 20.5 kilograms.
• Range: 250 metres to 6 kilometres.
• Speed: Mach 1.5 (approximately 1,850 km/h).
• Warhead: 2-kilogram adaptive proximity fuze.
• Target set: Low-flying drones, helicopters and fixed-wing aircraft.

DRDO stands for Defence Research and Development Organisation, the technical arm of the Ministry of Defence.

Static linkage: Defence technology (science and technology).

• SwaRail SuperApp: Ministry of Railways launched a single-window application developed by the Centre for Railway Information Systems (CRIS). It integrates ticket booking, PNR enquiry, food ordering and freight services under one login.
• South Georgia Island: World's largest iceberg A-23-A drifted toward South Georgia in the South Atlantic. The island is a British Overseas Territory. Its highest point is Mount Paget at 2,935 metres.
• Kara Sea geography: Bordered exclusively by Russia. Rivers draining into it include the Ob, Yenisei and Kara. Connected to the Barents Sea via Kara Strait and to the Laptev Sea via Vilkitsky Strait. Ice-covered September to May. Strategically important for the Northern Sea Route.