(GIST OF YOJANA) The Next Leap

GIST OF YOJANA : The Next Leap

JANUARY-2026

The Next Leap

Context:

The past decade witnessed dynamic developments in financial sector reforms, simplification of direct and indirect tax regimes, and credit availability across segments. The RBI’s Financial Inclusion Index recently gained strong momentum, rising to 67 in 2025, with bank account ownership rising to 89 per cent, creating greater scope for formal finance. Next-Gen GST reforms, rationalising GST slabs and rates, and the New Income Tax Bill 2025 are breakthroughs meant to simplify processes, rationalise rates, and enhance administration.

Financial Inclusion

Women own 39.2% of bank accounts; rural ownership at 42.2%.
Surge in DEMAT accounts from 33.26 million in 2021 to 143.02 million in 2024.
Skill India initiative supports vocational training for women.

Progress in Financial Inclusion

Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts surpassed 57.11 crores by November 2025.
Financial Inclusion Index rose to 67 in 2025, showing improvements in access and quality.
Account ownership increased to about 89-90% in 2024.

Tax Simplification

Transition from complex tax systems to a simplified IT-driven approach.
Income-tax Act 1961 replaced colonial-era laws.
Tax Reforms Committee led to broader tax base and lower marginal rates.

Recent Tax Reforms

GST introduced in July 2017 simplified indirect tax structure.
New laws and reforms in 2025 focused on reducing complexity and enhancing digitalization.
Income Tax Act 2025 aims to modernize tax regime with fewer sections and chapters.

Some Important Features of the New Income Tax Act 2025 are:

Simplification of Language
Introduction of the Tax Year Concept
Digital Integration
Dispute Resolution Committee (DRC)
Virtual Digital Assets (VDAs)

The Union Budget for 2025-26 has also provided significant relief to taxpayers, as the income tax slabs have been rationalised. The new NIL threshold has been expanded to Rs 12 Lakhs to provide relief to a million taxpayers and simplify tax calculation.

Credit Access

Credit Growth in India

Improved due to transparent recognition of NPAs
Resolution of stressed assets
Capitalisation of Public Sector Banks (PSBs)
Governance reforms
Stronger credit discipline through the Insolvency and Bankruptcy Code
Rapid financial inclusion via PM-JDY and digital banking

Current Credit Trends

Banking sector credit growth at 11.4% in FY2025
Q1 of FY2026 growth at 9.3%
Record-high bank credit expansion of Rs 22.3 trillion (16.3% YoY) in FY2024
Priority Sector Lending (PSL) at Rs 59.1 trillion (45.1% of adjusted net bank credit)

Role of Non-Banking Institutions

Increasing importance of NBFCs and fintech lenders
Private credit segment offering alternatives for consumer finance and MSME loans

Demand for Credit

Surge in formal account ownership among adults
RBI’s Financial Inclusion Index (FI-Index) at 67.0 in 2025

Future Focus

Strengthen rural banking outreach
Simplify collateral and documentation requirements
Expand NBFC/microfinance credit
Boost financial literacy for inclusive growth

Conclusion:

India’s economic reforms over the last decade aim to create a more inclusive and efficient financial system. This progress has improved access to savings, credit, and digital payments for low-income households, rural communities, and women. Achieving broad-based and socially inclusive growth is crucial for the vision of Viksit Bharat.