Morning Digest: Middle class gets a tax bonanza in Union Budget; Canada, Mexico and China hit with tariffs as Trump signs executive order, and more

The Hindu Morning Digest gives a select list of stories to start the day. Read the top news today on February 2, 2025

If your car is sputtering, and a faulty fading battery appears to be the cause, the only immediate alternative is to try and jumpstart it by hooking it up with another running car. Finance Minister Nirmala Sitharaman sought to do just that on Saturday (February 1, 2025) with her Union Budget for 2025-26 — jumpstart slowing economic activity with a significant ₹1 lakh crore tax stimulus for households of the sort the government has generally refrained from — in the hope that India’s weakening domestic demand will rebound and bring the economy back to the fast lane.

U.S. President Donald Trump on Saturday (February 1, 2025) signed an order to impose stiff tariffs on imports from Mexico, Canada and China, fulfilling a campaign promise but raising the prospect of increased prices for American consumers. Mr. Trump is declaring an economic emergency to put duties of 10% on all imports from China and 25% on imports from Mexico and Canada — America’s largest trading partners — except for a 10% rate on Canadian oil.

Dressed in a cream and red Madhubani saree, featuring Bihar’s iconic art, Union Finance Minister Nirmala Sitharaman heaped promises on the poll-bound State in her Budget presentation on Saturday (February 1, 2025). The slew of projects kept key NDA ally, the Janata Dal (United), in good humour, while generating envy from other regional parties, as well as taunts from the Opposition’s Rashtriya Janata Dal (RJD), which termed the announcements empty rhetoric in the absence of a special package for the State. 

At a time when the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the flagship rural employment programme, is running on a deficit of ₹9,754 crore, there has been no hike in fund allocation in the 2025-26 Budget. In FY 2025-26 Budget, ₹86,000 crore has been allocated for the scheme, which is same as the budget allocation for 2024-25. While the Centre insists that the MGNREGS is a demand driven scheme and additional funds are given when required, no upward revision was made in the ongoing financial year.

In a continuing quest to encourage small and medium firms in the clean energy sector, Union Finance Minister Nirmala Sitharaman has exempted cobalt powder and waste, the scrap of lithium-ion batteries, lead, zinc, and 12 other critical minerals from basic customs duty. In her July 2024 Budget, Ms Sitharaman had already exempted 25 critical minerals that are not domestically available from the basic customs duty net.

Prime Minister Narendra Modi on Saturday (February 1, 2025) applauded the Union Budget 2025-26, terming it a “force multiplier” that would fulfil the dreams and aspirations of 140 crore Indians and enable them to drive forward the mission of ‘Viksit Bharat’ (developed India). He said the Budget had opened up many sectors for the youth. In his address to the nation, Mr. Modi said the Budget would increase savings, investment, and consumption, and propel overall growth.

Authorities sifted through burned cars, damaged homes and charred debris Saturday (February 1, 2025) to gather clues that might explain why an air ambulance exploded into a fiery ball as it crashed on a busy Philadelphia street, killing seven and leaving no survivors on board. The small plane carrying six people, including a child who had just undergone treatment at a hospital, crashed just after takeoff from the small Northeast Philadelphia Airport, creating what witnesses described as a massive fireball and a chaotic street scene that left houses on fire, businesses damaged and cars destroyed.