IT'S BEEN JUST six months since the Union Budget 202425 was presented by Union Finance Minister Nirmala Sitharaman on July 23, 2024. This may not seem a long time in a nation's economy to come out with a fresh set of policies, but there have been big shifts since then.

The Indian economy's growth is set to slow to less than 7% for two consecutive years after clocking a higher rate of growth for three straight years. Demand from India's middle classes has dampened as persistently high inflation, led by food prices, has squeezed household budgets and cut down their consumption spends. Despite several measures, India's manufacturing sector is seen to contribute just about 17% to the GDP and private investment remains weak.

Globally, the political and economic landscape has also witnessed a sharp shift after elections in the US brought Donald Trump back as the President with a renewed pledge to Make America Great Again. His tariff and tax measures would affect people and goods across the world. The new order is visible in the tariffs he has imposed on Canada, Mexico and China, the strengthening of the US dollar and volatile equity markets.

"The passing of the era of rapid world trade growth clouds the outlook for India's export growth because, historically, India's export growth has been a high beta play on global export growth. This means domestic growth levers will be relatively more important than external ones in the coming years," stated the Economic Survey 2024-25, presented just before Union Budget 2025-26. It has projected GDP growth in the 6.3-6.8% range in FY26, after an estimated 6.4% this fiscal.

Finance Minister Nirmala Sitharaman's Union Budget 2025-26 tried to take these problems head on and prioritised boosting domestic growth by focussing on four key themes: agriculture, micro, small and medium enterprises (MSMEs), investment, and exports.