As Finance Minister Nirmala Sitharaman prepares to present the first full Budget of the Modi 3.0 government, industry leaders across sectors have voiced their expectations, calling for measures to enhance income tax relief, spur job creation, and streamline business operations to accelerate economic growth.
The industry is optimistic about potential announcements aimed at boosting consumption, increasing capital expenditure, providing relief to the housing sector, and fostering technological innovations. These steps, many believe, are essential to sustain momentum amidst global economic uncertainties and moderating domestic growth.
Moin Ladha, Partner at Khaitan & Co, noted that the upcoming Budget could bring significant regulatory changes, including streamlined compliance and amendments to foreign investment policies. “One key policy change could be the introduction of 100% foreign direct investment (FDI) in the insurance sector, up from the current 74%,” Ladha said.
Raoul Kapoor, Co-CEO of Andromeda Sales and Distribution, emphasized the need for relief measures for the middle-income group, which has been grappling with inflation and rising household expenses. “Tax benefits for this segment have remained stagnant for years. For instance, the tax deduction limit on home loan interest payments, unchanged since 2014 at Rs 2 lakh, should be increased to reflect the significant rise in real estate costs,” Kapoor suggested.
The Budget, scheduled for February 1, 2025, comes at a time when the government must balance growth aspirations with fiscal discipline. Economists and industry players have outlined specific areas of focus that could shape the policy framework:
- Cybersecurity: Sunil Sapra, Founder and Chief Growth Officer of Eventus Security, expects the government to prioritize investments in cybersecurity infrastructure to counter evolving threats. “Strengthening national resilience against cyberattacks is imperative,” Sapra said.
- Empowering Women and Inclusive Growth: Abhishek Dev, Co-founder and CEO of Epsilon Money, highlighted the need for policies that empower women in finance. “Tax incentives for women entrepreneurs, streamlined FDI approvals, and rationalization of capital gains tax can invigorate market participation and drive economic momentum,” Dev remarked.
- Battery Manufacturing and Green Energy: Ayush Lohia, CEO of LOHIA, urged the government to incentivize local manufacturing of batteries. “India lags behind global leaders like China in battery production. Favourable policies and subsidies could attract investments and reduce import dependency,” Lohia said. He also called for charging stations to be classified as infrastructure to reduce setup costs.
- Drones in Logistics: Ankit Kumar, CEO of Skye Air, stressed the need for targeted policy measures to boost drone adoption in the logistics sector. “Drone technology can transform last-mile delivery solutions, especially in quick-commerce and e-commerce,” Kumar stated.
- MSME Support: Vinumon S, Founder and CEO of Thence, highlighted delays in the MSME Samadhaan initiative, which facilitates dues recovery for small businesses. “Significant delays in resolving disputes hinder MSME growth. Streamlining this process is essential,” Vinumon said.
- Education Infrastructure: Jasmeet Singh Chhabra, Co-founder of Crimson Schools, called for reforms in the school education sector. “Relaxing restrictions on FDI and external commercial borrowings (ECB) for educational trusts could unlock funding for modern infrastructure,” Chhabra suggested.
- Digital Infrastructure: Nishant Rathi, Founder and Director of NeoSOFT, emphasized the importance of investments in data centres, 5G, and high-speed internet. “Focused support for AI, IoT, and 5G enterprises can position India as a global innovation hub,” Rathi said. He also called for streamlined regulatory procedures to ease the burden on startups and SMEs.
The 2025 Union Budget is poised to address these pressing demands, balancing growth ambitions with the need to foster an inclusive and resilient economy.