Budget Special

Focus on reforms and inclusivity

Union Budget

The Viksit Bharat Budget 2025-26 takes a comprehensive approach, aiming to empower entrepreneurs, MSMEs, and small businesses, according to Prime Minister Narendra Modi. Prioritising trade facilitation, it addresses national priorities and lays the foundation for future growth. The key initiatives focus on rural prosperity, agriculture, and supporting startups will drive innovation and technological advancements.

The Union Budget 2025-26, presented by Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman reinforced the government’s commitment to accelerating economic growth, promoting inclusive development, stimulating private sector investments, uplifting household confidence, and improving the spending power of India’s expanding middle class. To further streamline trade, the Budget proposes changes in GST laws. It introduces a new clause defining Unique Identification Marking to facilitate the implementation of a track-and-trace mechanism for better regulation.

Centre of Excellence

A National Manufacturing Mission covering small, medium and large industries for furthering “Make in India” was announced. Besides supporting food processing, a National Institute of Food Technology, Entrepreneurship and Management is to be set up in Bihar.

The government is making a push toward research, development, and innovation by allocating ₹20,000 crore for a private sector-driven initiative, as outlined in the July Budget. As part of this effort, a Centre of Excellence in Artificial Intelligence for Education will be established, with a total investment of ₹500 crore, aiming to transform learning through advanced AI technologies. Moreover, a Deep Tech Fund is being explored to nurture and accelerate next-generation startups, increasing growth in cutting-edge industries.

Research

To strengthen technological research, the PM Research Fellowship will provide 10,000 fellowships with enhanced financial support, benefiting scholars in premier institutions like IITs and IISc. At the same time, an Export Promotion Mission will be launched to drive India’s global trade, setting sectoral and ministerial targets in collaboration with the Ministries of Commerce, MSME, and Finance. The budget aims at four powerful engines: Agriculture, MSME, Investment, and Exports. 

MSME Units for Food Irradiation, Quality & Safety Testing

The financial support for setting up 50 multi-product food irradiation units in the MSME sector has been provisioned. The setting up of 100 food quality and safety testing labs with NABL accreditation will be taken up.

Tax benefit

In a move to boost middle-class household savings and spur consumption, the government has announced that no income tax will be levied on an average monthly income of up to ₹1 lakh, offering significant financial relief and improving disposable income for millions of families.

Technology framework

India ranks second-largest globally in fish production and aquaculture. Seafood exports are valued at INR 60,000 crore. To unlock the untapped potential of the marine sector, the government will bring in an enabling framework for sustainable harnessing of fisheries from the Indian Exclusive Economic Zone and High Seas, with a special focus on the Andaman & Nicobar and Lakshadweep Islands. A National Institute of Food Technology, Entrepreneurship and Management will be established in Bihar to provide a fillip to food processing activities in the entire Eastern region. It will result in enhanced income for the farmers through value addition to their produce and skilling, entrepreneurship and employment opportunities for the youth.

A new provision will be introduced to enable importers or exporters, after clearance of goods, to voluntarily declare material facts and pay duty with interest but without penalty. It will incentivise voluntary compliance.

Skilling

A new centrally sponsored scheme, as the 4th scheme under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over 5 years. 1,000 Industrial Training Institutes will be upgraded in the hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of the industry, and new courses will be introduced for emerging needs.

The Model Skill Loan Scheme will be revised to facilitate loans up to ₹7.5 lakh with a guarantee from a government-promoted Fund. This measure is expected to help 25,000 students every year.

The government will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability.

FY-25 is estimated to end with a fiscal deficit of 4.8%, target to bring it down to 4.4% IN FY-26

Industry speaks-

Arun Awasthy, President & Managing Director, Johnson Controls India:

The Union Budget 2025 marks a decisive step forward in strengthening urban infrastructure, manufacturing, and public-private partnerships (PPPs), all critical to India’s long-term economic growth. The establishment of a three-year pipeline of PPP projects, along with ₹1.5 lakh crore in interest-free loans for state-led infrastructure development, signals the government’s commitment to sustained private sector participation in nation-building.

With urbanization on the rise, the focus on modernizing cities and enhancing infrastructure resilience is more important than ever. However, for these investments to create a lasting impact, integrating energy efficiency, Smart building solutions, and climate-conscious urban planning into large-scale projects is essential. The ₹1,500 crore allocation to solar grid development reinforces India’s commitment to green energy and ensures that India’s economic growth is realised in alignment with our sustainability goals and rendered future-proof.

The government’s emphasis on strengthening rural infrastructure and promoting vocational skilling will enable industries to flourish beyond urban centers, creating balanced, regional growth. Furthermore, The National Manufacturing Mission is a game-changer for India’s self-reliance, focusing on clean-tech manufacturing and bolstering industrial growth. This, combined with the expansion of aviation infrastructure, ensures India is poised for greater global integration.

As India moves towards a sustainable and connected future, the key will lie in seamless implementation. At Johnson Controls India, we are committed to working alongside stakeholders to drive forward-looking, sustainable infrastructure that powers India’s growth story”

Mahesh Ramanujam, CEO of Global Network for Zero:

“The Union Budget 2025 signals a transformative shift in India’s infrastructure development, placing sustainability at the core of growth. By advancing long-term project pipelines and incentivizing green reforms, it fosters the integration of eco-friendly practices into large-scale infrastructure. Extending development beyond metro cities ensures sustainability remains a nationwide priority, driving environmentally conscious growth in Tier 2 and 3 cities.

The allocation of ₹3,412.82 crore to the Ministry of Environment, Forest and Climate Change is an encouraging step. The announcement of 100 GW Nuclear power generation capacity by 2047 as an alternative to fossil fuel and investment in advanced technologies like Small Modular Reactors provides a clear signal of the government’s intent to fulfil its Viksit Bharat vision. Furthermore, as the country adds 80 GW of thermal generation capacity by 2032 to meet the sharp growth in electricity demand, it aligns well with the Net Zero 2070 goal. 

This presents an opportunity for the green buildings sector to guide projects in adopting sustainable standards, ensuring that India’s rapid infrastructure expansion aligns with global net-zero goals. It is a forward-thinking budget that recognizes sustainability as the key pillar of India’s future development.

Ashish Bhandari, MD & CEO, Thermax:

The Union Budget’s strong push towards manufacturing and the Make in India initiative reaffirms the nation’s commitment to becoming a global manufacturing powerhouse. The newly announced National Manufacturing Mission, with its comprehensive policy support and execution roadmap, will streamline the sector and drive exponential growth.

Equally important is the focus on green and clean development—supporting clean tech manufacturing will be a game-changer in advancing energy efficiency and accelerating our journey towards sustainability.

Additionally, strengthening workforce skills through global skilling partnerships will help bridge critical gaps and position India as a key player in the worldwide supply chain. With these strategic initiatives, India is well on its way to achieving sustainable, inclusive, and technology-driven industrial growth.

Warren Harris, CEO & MD, Tata Technologies:

The budget’s focus on establishing a National Manufacturing Mission aligns with our goal of engineering in India for ‘Make in India’ and enhancing the nation’s self-reliance in manufacturing. This initiative is poised to attract investments and improve efficiency, positioning Indian companies as globally competitive players.

The establishment of five National Centres of Excellence for Skilling is a pivotal move in building a future-ready workforce. This initiative resonates with our commitment to engineering a better future for India’s youth through investment in in-demand training programs across Industry 4.0, IoT, and advanced manufacturing and collaborating with state governments to upgrade ITIs into technology hubs.

Additionally, the allocation of ₹500 crore for a Centre of Excellence in Artificial Intelligence for education underscores the importance of fostering innovation and research in AI, which will benefit both the education sector and the broader technology landscape.

Vineet Agarwal, Managing Director of Transport Corporation of India Ltd:

The Union Budget for FY26 maintains a healthy ₹10.18 lakh crore capital expenditure outlay while ensuring fiscal prudence, which is a commendable approach to balance growth and economic stability. The Finance Minister’s focus on multimodal connectivity and digital infrastructure will strengthen logistics efficiency and reduce costs. The revamped Shipbuilding Financial Assistance Policy, inclusion of large ships in the infrastructure master list, and the ₹25,000 crore Maritime Development Fund will enhance India’s coastal and inland logistics capabilities.

Additionally, the modified UDAN scheme and air cargo warehousing upgrades will improve regional connectivity, benefiting time-sensitive industries. The launch of BharatTradeNet as a unified trade platform will streamline international trade, complementing ULIP and PM Gati Shakti.

With continued policy support, green logistics, private sector participation, and PPP-driven infrastructure pipelines will drive the next phase of India’s logistics transformation, making supply chains more resilient, efficient, and globally competitive.

S Sunil Kumar, Country President, Henkel Adhesive Technologies India:

The Union Budget 2025, with its emphasis on inclusive development, accelerated growth, and private sector investments, marks a pivotal moment in strengthening India’s industrial and economic foundation. The rationalization of customs tariffs will enhance India’s global competitiveness, benefiting manufacturers. The focus on MSMEs—crucial contributors to India’s GDP and exports—will empower them to diversify offerings and expand internationally. The strategic and forward-thinking approach fosters a pro-business environment that encourages both FDI and domestic investment.

The ambitious 100 GW nuclear target represents a bold commitment to sustainable growth, driving investments in infrastructure, technology, and human capital while positioning India as a leader in clean energy on the global stage. Finance Minister Nirmala Sitharaman has also emphasized the government’s commitment to strengthening the domestic electronics equipment industry, creating significant opportunities for youth. The government’s emphasis on skill development across industries, particularly in the nuclear and footwear sectors, will create thousands of jobs and will also build a robust workforce prepared to meet future challenges. With the footwear sector alone employing over 4 million people, the focused scheme will drive significant job creation and enhance India’s position in the global supply chain. Lastly, the restructuring of income tax slabs will enhance disposable income, providing greater purchasing power to consumers. By directly benefiting the middle class, this policy will act as a catalyst for broader consumption, supporting businesses and driving momentum across key sectors.

Sebi Joseph, President, Otis India: 

This Budget lays a strong foundation for India’s next phase of growth, with a sharp focus on agriculture, infrastructural expansion, digital transformation, and sustainable development. The reforms on personal income tax are going to drive consumption. The vision of Sabka Vikas over the next five years will be instrumental in driving balanced growth across industries and steering India towards its larger goal of becoming a developed nation 100 years after independence in 2047.

The thrust to further ‘Make in India’ through a National manufacturing mission, and building national centers of skilling, and center of excellence for AI, are progressive measures. Encouraging private-public partnerships in building the infrastructure is commendable. Continued attention to enhance connectivity across the country through the operationalisation of new airports will boost the economy. The urban challenger fund would create new city growth hubs.

The budget sets a confident path for India’s transformation. The initiatives will not only strengthen India’s position as a global economic force but also enable a smarter, more connected, and more inclusive urban landscape. It offers a clear roadmap—one that ensures India is not just preparing for the future but actively shaping it.

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