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Union Budget 2025-26: Economic Setbacks and Concerns UPSC NOTE

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  Discontinuation of Job Creation Focus The 2025 Budget did not address the Prime Minister’s Package , aimed at creating job opportunities f...

 Discontinuation of Job Creation Focus

  • The 2025 Budget did not address the Prime Minister’s Package, aimed at creating job opportunities for 4.1 crore youth, which was a key focus of the previous Budget.

  • The future of the employment-linked schemes, such as the Employment Linked Incentive scheme, looks uncertain, with little progress made.

Deflationary Effects and Budget Cuts

  • The Budget reduces government expenditure significantly, including cuts to capital expenditure, welfare schemes, and rural development programs.

  • Public spending on rural areas, agriculture, education, health, and infrastructure is severely cut, impacting consumption and investment, especially in rural regions.

Income Tax Relief vs. Limited Impact

  • While the income tax rebate for individuals earning up to ₹12 lakh is increased, only 22% of India’s salaried workforce benefits from this.

  • The rebate, estimated to cost ₹1 lakh crore, is seen as insufficient to boost overall consumption, especially for the majority of low-income workers who would have benefitted more from indirect tax cuts.

Inadequate Economic Strategy

  • Despite tax cuts boosting corporate profits, they have not led to higher investment or job creation in the private sector.

  • The government's reliance on tax breaks to stimulate demand, while slashing expenditure, is unlikely to achieve the desired economic growth and employment generation

  • The overall strategy appears lacking and ineffective.

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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Union Budget 2025-26: Economic Setbacks and Concerns UPSC NOTE
Union Budget 2025-26: Economic Setbacks and Concerns UPSC NOTE
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Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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