Budget 2025 balances national development necessities with fiscal priorities: FM Nirmala Sitharaman

Union Budget 2025 News: Finance Minister Nirmala Sitharaman told Parliament on Tuesday that the Narendra Modi 3.0 government's Union Budget for 2025-26 balances national development necessities with fiscal priorities, stating that it proposes to use 99 per cent of market borrowings for capital expenditure (capex). This comes to about 4.3 per cent of the country's gross domestic product (GDP), said the finance minister.

Taking this into account, the effective capex earmarked for FY26 amounts to Rs 15.48 lakh crore, said the finance minister in response to a discussion on the government's annual financial plan."It indicates that the government is using almost the entire borrowed resources for financing effective capital expenditure. So the borrowings are not going for revenue expenditure or committed expenditure, or any of those kinds... It's going only for creating capital assets. So, in effect, the government intends to use about 99 per cent of borrowed sources to finance effective capital expenditure in the upcoming year," said Sitharaman. 

Her remarks came days after she presented the Narendra Modi 3.0 government's first full-year Budget, pegging fiscal deficit—or the shortfall between the government's expenditure and revenue—at 4.4 per cent of the GDP for the financial year beginning April 1. 

Preparing Budget more challenging today than ever before: Finance Minister

She highlighted that preparing the Union Budget is more challenging than ever given the world's scenario has turned 180 degrees in the past 10 years. 

Watch Live: Smt @nsitharaman's reply to the General Discussion on Union Budget 2025-26 in Lok Sabha. @FinMinIndia @sansad_tv
#BudgetSession2025 https://t.co/juyoO7W5Em

— Nirmala Sitharaman Office (@nsitharamanoffc) February 11, 2025

Budget comes amid immense uncertainties, changes in global macro environment: Nirmala Sitharaman 

The finance minister said that the Budget 2025-26 comes amid "immense uncertainties, changes in the global macroeconomic environment, stagnating global growth and sticky inflation".

Trends in inflation, especially food prices, appear to be moderating, said the finance minister. "Inflation management receives the highest priority of this government. Overall, retail inflation is within the notified tolerance band of 2-6 per cent," she said.

Nirmala Sitharaman speaks on rupee weakness vs US dollar

On the aspect of depreciation in the rupee against its American counterpart, the minister said that various domestic as well as global factors have influenced the value of rupee against the US dollar.

Between October 2024 and January 2025, the rupee has lost about 3.3 per cent of its value against the greenback. However, that is better than some of the rupee's Asian peers.