Welcome to our priority series for ISS aspirants. We begin with the most foundational document of the year, the one that shapes almost every Economy answer you write in the exam.
Every February, the Union Budget becomes the single most important reference for any Indian Statistical Service aspirant. The Budget 2025-26 is no different. It blends fiscal consolidation with serious capital expenditure, pushes a new income tax law, and lays down the broad direction for the year. If you remember even ten clean numbers from this Budget, half your Economy questions become much easier to attempt.
What this Budget really tries to do
Finance Minister Nirmala Sitharaman presented the Budget on 1 February 2025. The theme is simple. Push consumption through tax relief, keep capital expenditure high, and stay on the path of fiscal consolidation. The Budget identifies four engines of growth, namely Agriculture, MSMEs, Investment, and Exports, and puts most schemes under one of these four buckets.
The headline numbers you must remember
Total expenditure is estimated at around 50.65 lakh crore rupees and total receipts other than borrowings at around 34.96 lakh crore rupees. The fiscal deficit is targeted at 4.4 percent of GDP, down from 4.8 percent in the revised estimate of 2024-25. Capital expenditure is pegged at around 11.21 lakh crore rupees, which is roughly 3.1 percent of GDP.
What the middle class actually got
Under the new tax regime, no income tax is payable up to 12 lakh rupees of annual income. For salaried individuals, the standard deduction of 75,000 rupees pushes this effective limit to 12.75 lakh rupees. The slabs were also restructured, which means almost every taxpayer using the new regime saves something. Updated income tax return time limit was extended from two years to four years.
The big sectoral pushes
PM Dhan-Dhaanya Krishi Yojana covers 100 low productivity districts. The Urban Challenge Fund is set at 1 lakh crore rupees with 10,000 crore rupees for the year. A Maritime Development Fund of 25,000 crore rupees is announced. The FDI limit in insurance is raised from 74 percent to 100 percent, conditional on the entire premium being invested in India. Jal Jeevan Mission is extended till 2028.
Where MSMEs and startups gain
The credit guarantee cover for MSMEs is doubled from 5 crore rupees to 10 crore rupees. For startups, it is raised from 10 crore rupees to 20 crore rupees, with a reduced fee in 27 focus sectors. A second Asset Monetisation Plan 2025-30 is announced to recycle 10 lakh crore rupees of capital. The National Manufacturing Mission supports small, medium, and large industries together.
Quick Reference Table: Key Budget 2025-26 Numbers
| Indicator | Budget 2025-26 Estimate |
| Total Expenditure | About 50.65 lakh crore rupees |
| Total Receipts (excluding borrowings) | About 34.96 lakh crore rupees |
| Net Tax Receipts | About 28.37 lakh crore rupees |
| Fiscal Deficit | 4.4 percent of GDP |
| Capital Expenditure | About 11.21 lakh crore rupees |
| Gross Market Borrowings | About 14.82 lakh crore rupees |
| Income Tax Nil Slab (new regime) | Up to 12 lakh rupees |
| Insurance FDI Limit | Raised to 100 percent |
| MSME Credit Guarantee Cover | Raised from 5 to 10 crore rupees |
A Real Aspirant Story
Imagine an aspirant named Priya from Lucknow preparing for ISS. She used to confuse fiscal deficit with revenue deficit. Once she fixed five numbers in her mind, that is 50.65, 34.96, 4.4 percent, 11.21, and 14.82 lakh crore rupees, every Budget question became a recall task instead of a guess. That is the entire trick. Lock five anchor numbers and the rest follows.
Quiz: Union Budget 2025-26
Q1. What is the fiscal deficit target set in the Union Budget 2025-26?
(A) 3.1 percent of GDP
(B) 4.4 percent of GDP
(C) 4.8 percent of GDP
(D) 5.1 percent of GDP
Answer: (B) 4.4 percent of GDP. The fiscal deficit was targeted at 4.4 percent of GDP, down from 4.8 percent in the revised estimate of 2024-25.
Q2. Under the new tax regime in Budget 2025-26, income tax is nil up to which level?
(A) 7 lakh rupees
(B) 10 lakh rupees
(C) 12 lakh rupees
(D) 15 lakh rupees
Answer: (C) 12 lakh rupees. No income tax is payable up to 12 lakh rupees under the new regime, and up to 12.75 lakh rupees for salaried individuals after standard deduction.
Q3. The capital expenditure in Budget 2025-26 was pegged at approximately how much?
(A) 8.50 lakh crore rupees
(B) 11.21 lakh crore rupees
(C) 14.82 lakh crore rupees
(D) 50.65 lakh crore rupees
Answer: (B) 11.21 lakh crore rupees. Capital expenditure was about 11.21 lakh crore rupees, roughly 3.1 percent of GDP.
Q4. The FDI limit in the insurance sector was raised to what level in Budget 2025-26?
(A) 49 percent
(B) 74 percent
(C) 90 percent
(D) 100 percent
Answer: (D) 100 percent. The insurance FDI limit was raised from 74 percent to 100 percent, subject to the condition that the entire premium is invested in India.
Q5. The credit guarantee cover for micro and small enterprises was raised from 5 crore rupees to what amount?
(A) 7 crore rupees
(B) 10 crore rupees
(C) 15 crore rupees
(D) 20 crore rupees
Answer: (B) 10 crore rupees. The credit guarantee cover for micro and small enterprises was doubled from 5 crore rupees to 10 crore rupees.
FAQs: Union Budget 2025-26
What is the fiscal deficit target in Union Budget 2025-26?
The fiscal deficit in Union Budget 2025-26 is targeted at 4.4 percent of GDP, continuing India’s path of fiscal consolidation.
What is the new income tax exemption limit in Budget 2025-26?
Under the new tax regime, income tax is nil up to 12 lakh rupees, and effectively up to 12.75 lakh rupees for salaried individuals after the standard deduction.
What is the total expenditure in Union Budget 2025-26?
The total expenditure in Union Budget 2025-26 is estimated at around 50.65 lakh crore rupees.
What are the four engines of growth in Budget 2025-26?
The Budget identifies four engines of growth, namely Agriculture, MSMEs, Investment, and Exports.
Why is Union Budget 2025-26 important for ISS aspirants?
It is the single most important reference for the Economy section of the ISS General Studies paper, covering fiscal deficit, capital expenditure, tax reform, and major scheme allocations.
Bridge to the Next Topic
The Budget also signalled the arrival of a brand new direct tax law, replacing the six-decade-old Income Tax Act of 1961. Let us understand that next, because every ISS interview panel and Mains paper is now likely to touch it. Read here