Union Budget 2025 Expectations: From Tax Cuts to Sectoral Reforms, Wishlist for FM Sitharaman on February 1

As we approach Union Budget 2025, we hope for measures that empower investors and enhance financial planning opportunities. Encouraging higher participation in equity markets through expanded tax incentives on investments in mutual funds and other equity-linked instruments could bolster long term wealth creation. Simplification of tax laws and alignment with global best practices can aid in making investment portfolios more tax efficient and encourage disciplined investing, said Mayank Bhatnagar, Co-founder & COO at FinEdge.

"Additionally, given the prevailing market volatility, policies that focus on long-term capital gains tax structures and incentivizing investments in asset classes that create long term wealth (like equity), would be highly welcome. At FinEdge, we believe that creating an investor friendly environment is crucial for driving inclusive financial growth. A forward-looking budget that prioritises these aspects will help create depth for long term investing opportunities for individuals," Bhatnagar added.

"In alignment with India's ambitious goal of achieving a $7 trillion economy by 2030, the upcoming Budget 2025 presents a valuable opportunity to address key challenges related to efficiency, sustainability, and global competitiveness. The logistics sector stands at a transformative crossroads, and the Union Budget 2025-26 holds the potential to shape its growth trajectory significantly," said Subhasish Chakraborty, Founder, Chairman and Managing Director of DTDC Express Ltd.

"We encourage the government to prioritise investments in infrastructure modernisation, particularly in the creation of smart logistics parks and multimodal transport networks that embrace sustainable practices. A strong emphasis on green logistics is essential, with incentives to promote the use of electric vehicles, biofuels, and IoT-enabled transport systems. These measures will help lower logistics costs while reducing carbon emissions, paving the way for a sustainable future in the sector," Chakraborty added.

"As we approach the Union Budget 2025, the technology and engineering sector is looking forward to measures that can propel India into its next phase of economic and industrial growth. To achieve the ambitious goals outlined in India’s roadmap for a $5 trillion economy, the budget should prioritise innovation-driven policies, investments in emerging technologies and the development of products in India—for India and the world," said Warren Harris, CEO & MD, Tata Technologies.

"Key growth drivers such as smart manufacturing, AI, digital transformation and software-defined vehicles (SDVs) require strong government backing through incentives for R&D, skill development and infrastructure enhancement. We recommend increased allocation toward upskilling initiatives aligned with Industry 4.0, creating a future-ready workforce capable of excelling in advanced technologies like AI, IoT and cybersecurity," Harris added.

"In this post-pandemic era, we have seen significant growth in the co-working space due to organisations opting for working spaces that are economical, flexible and well advanced in terms of infrastructure. The segment supports entrepreneurs, SME’s, MSME’s and other organisations across cities where people are looking for cost effective yet employee friendly spaces," said Sreenivas Tirdhala, Co-Founder & Chief Strategy Officer, iSprout.

"As we look forward to the budget 2025, we expect the government to reduce tax such as the TDS rate, stamp duty and registration fees for the lease deed so that the industry can grow and expand. With favourable tax policies, organisations will be able to contribute substantially towards the growth of the industry and nation,” Tirdhala added.

“With cyber threats escalating, enhanced government support, innovation-driven policies and significant investments in cybersecurity infrastructure are paramount. Beyond BFSI and Critical Infrastructure sectors, stringent cybersecurity frameworks must extend to other industries, ensuring robust protection of our nation’s digital assets. SMEs, particularly vulnerable to cyberattacks, need targeted assistance to adopt affordable and effective cybersecurity solutions, safeguarding their growth and fuelling the broader economy," said Neehar Pathare, MD, CEO, and CIO, 63SATS.

"A cybersecurity rating system, akin to credit ratings, could set benchmarks, driving organisations to enhance security, build transparency, and foster trust in the digital ecosystem. From a citizen’s perspective, a mass cyber education drive—integrating web programmes, evolving offline IT certifications, and introducing cybersecurity in school curriculums—will not only address the workforce shortage but also reduce cyber theft and financial losses. At 63SATS, we are committed to empowering India’s vision of a Viksit and Surakshit Bharat," Pathare added.

“This year our goal is to invest strategically and expand our capabilities. With the rise in technological advancements, our expectations from budget 2025 are to strengthen the IT sector with the apt digital infrastructure, focus on cyber security and skill advancement to continue leading globally in the technology space," said Abhishek Narayan, Co-Founder & Director, Growing Pro Technologies.

"Additionally,  for SMEs and MSMEs, it is significant to introduce streamlined regulatory frameworks and incentives to continue to serve as pivotal drivers of economic growth," Narayan added.

"Investments in logistics infrastructure has a direct impact on growth of trade. Further, increase in capex outlay focused on a multimodal transport ecosystem, modernising physical, digital and social infrastructure, will help in enhancing India's connectivity to emerging and mature markets," said Rizwan Soomar, Chief Executive Officer and Managing Director, DP World Middle East North Africa and India Subcontinent.

"Railways are the backbone of India's logistics ecosystem. Look forward to the dedicated rail freight corridors operationalised to scale movement to- and from- ports and to connect production and consumption centres in India even more effectively. Similarly, the investments in infrastructure and facilities at ports and inland cargo terminals, too, must be encouraged and incentivised. Further digitalisation and automation of freight operations could be prioritised to improve efficiency and reduce the cost of logistics," Soomar added.

"As we approach the 2025 Union Budget, we are optimistic about continued government investment in infrastructure, multimodal logistics hubs and digital platforms," said Kami Viswanathan, President, FedEx, Middle East, India Subcontinent and Africa (MEISA).

"The priorities of the Amrit Kaal plan are vital for creating an efficient logistics ecosystem that reduces costs, enhances supply chain efficiency, and drives India’s global competitiveness. We also hope to see greater focus on streamlining trade processes and promoting green logistics to accelerate sustainable growth," Viswanathan added.

"India's ambitious export target of $2 trillion by 2030 highlights its commitment to global trade leadership. The industrial sector needs government action to tackle challenges like high costs, liquidity issues and trade uncertainties to boost global competitiveness. It is expected that the government will extend schemes like Interest Equalisation and RoDTEP to reduce financing and production costs for exporters directly," said Abhishek Dua, CEO & Co-Founder, Showroom B2B.

"Additionally, measures such as expanding concessional export financing, introducing targeted tariff rationalisation and incentivising high-value manufactured exports are critical and need to be emphasised. Simplifying export compliance and investing in upskilling will ensure India’s growth in international markets," Dua added.

"FOMC today announced a pause in rate cuts giving themselves more time to lower inflation and to assess how President Donald Trump’s policies will affect the economy.

For Indian economy, A pause may pressure the Government of India and the RBI to wait for stability in the global environment while pushing for a more favorable rapport with the US before adopting liberal, growth-oriented policies. However, the upcoming Union Budget on February 1, 2025, and the RBI’s next REPO rate announcement may offer a much-needed positive signal," said Deepak Ramaraju, Senior Fund Manager, Shriram AMC.

"From an Indian equity market perspective, this could add to a bit of uncertainty of timing of future rate cuts, leading to higher volatility. One can expect the markets to remain negatively biased till further economic data emerges. This may translate to FII selling to continue. However, a positive budget might change the sentiments of the markets," Ramaraju added

“We hope the upcoming Union Budget continues to prioritize sustainability and resilience in the water and sanitation sector, building on the progress made in previous allocations. It is essential to focus on ensuring the long-term functionality of water distribution and sanitation infrastructure by addressing operational and financial sustainability. With over 80% of piped water supply dependent on rapidly depleting groundwater, resource sustainability, particularly in agriculture, must be a priority to ensure drinking water security," said Bishwadeep Ghose, Country Director for Water For People India.

"Additionally, leveraging circular economy principles such as reusing treated wastewater for agriculture and non-potable uses and integrating treated sanitary waste for soil enhancement, can promote water quality and efficiency," he added.

"The fiscal deficit target for 2026 is set at an expected rate at 4.5% of GDP; this represents a baseline reduction for FY25 when the deficit was registered at 4.8%. Such contraction in the fiscal deficit may go a long way in exuding confidence in the capital markets. A steady trajectory of fiscal consolidation aligned with medium-term government plans provides a focused approach to development among such sectors as further erosion of the fiscal deficit may affect capital expenditure and social sector investment, thus anchoring perceptions of the market follows the medium-term fiscal plan and allows a focus on social investments and capex as the fiscal deficit gets narrowed," said Puneet Singhania, Director at Master Trust Group.

"Tax incentives for startups and MSMEs should include introducing tax breaks or deferments for startups during their initial years. Simplifying tax compliance, especially for smaller businesses, and expanding exemptions under schemes like Startup India would encourage innovation and growth. Enhanced funding access can be achieved by establishing government-backed venture capital funds, low-interest loans, and credit guarantees for startups. Processes for availing these funds should be simplified, and private investment in early-stage startups should be incentivized to bridge the funding gap," said Tabrez Alam, Chief Strategy Officer, Bobble AI.

"I am optimistic that this year’s budget will reinforce the government's commitment to farmer welfare by enhancing market linkages, improving access to quality inputs, promoting digital technologies, and supporting the formation of more Farmer Producer Organizations (FPOs). The Digital Agriculture Mission, with initiatives like the Digital General Crop Estimation Survey, is a step in the right direction to modernize the sector. Additionally, incentivizing investments in research, particularly in crop productivity, resource-use efficiency, and climate-smart practices, can drive sustainable growth and increase farmer incomes," said Simon Wiebusch, Country Divisional Head, Crop Science Division of Bayer in India, Bangladesh and Sri Lanka.

"Budget 2025 presents a crucial chance to strengthen the startup ecosystem, particularly in fintech. Extending the tax holiday under the Startup India initiative or reducing corporate tax rates for startups can provide much-needed financial relief. Encouraging the adoption of advanced technologies like AI and blockchain and supporting digital payment infrastructure will foster innovation. Additionally, simplifying GST compliance and introducing funding-friendly policies will empower startups to scale efficiently. Startups are pivotal to India’s economic progress, and focused measures in this budget can propel their growth and solidify India’s position as a global fintech leader,"said Kundan Shahi, Founder, LegalPay.

"In the realm of defence, we foresee budgetary allocation towards capital expenditure to hover around 7 to 8 pecrcent in FY26; shall this be given effect, it would amount to approximately ₹1.9 lakh crore. The modernisation of the defence forces, the strengthening of naval assets, and the promotion of domestic manufacturing formed around-dwellers into a true path towards the realization of an Aatmanirbhar Bharat and a successful 'Make in India'," said Puneet Singhania, Director at Master Trust Group.

"To strengthen India’s self-sufficiency in food production, the budget must prioritise greater investments in agricultural research and innovation. Policy decisions to advance agriculture by giving access to globally available tools for Indian farmers, are key. Advancements in seed technology, and precision application techniques will be critical in reducing import dependency and ensuring long-term productivity. Encouraging R&D tailored to India’s diverse agro-climatic conditions will help farmers enhance yields, optimise input use, and mitigate risks associated with climate change. Additionally, strengthening rural infrastructure—such as cold storage, logistics, and food processing facilities—will be key to reducing post-harvest losses and improving value realization for farmers. With the right policy framework, India can reinforce its leadership in global food supply chains while ensuring self-reliance and economic resilience in the sector," said Simon Wiebusch, Country Divisional Head, Crop Science Division of Bayer in India, Bangladesh and Sri Lanka.

"The waste management sector is at a crossroads due to the recent GST revisions. The hike from 5% to 18% has introduced significant challenges, particularly for businesses striving to innovate and contribute to sustainability goals. We urge the government to consider rolling back the GST hike in the upcoming budget. Additionally, while the reverse charge mechanism (RCM) is a solution but it has added compliance complexity, especially for SMEs. Streamlining RCM further or exempting critical industries like waste management would be helpful, enabling businesses to focus on their core mission. A supportive tax regime is essential to drive investment, support innovation, and build robust infrastructure within the waste management sector. We look forward to support from the government to create a balanced GST structure that builds sustainable growth and aligns with India’s environmental objectives," said Nimit Aggarwal, Founder & Managing Director at EcoEx.

"Budget 2025 presents an opportunity to accelerate MSME growth, affordable housing, and the expansion of the Unified Lending Interface (ULI). For MSMEs, easing lending norms and infusing liquidity remain critical. Expanding credit guarantee schemes and revising co-lending frameworks to include a wider range of NBFCs can bridge the sector’s ₹40 lakh crore credit gap. Targeted liquidity support will further strengthen small business financing. In affordable housing, revisiting lending caps and providing incentives for developers can boost accessibility. Adjustments in financing constraints will encourage supply and improve homeownership opportunities. Budgetary allocations for R&D in AI, alongside an expanded scope for frameworks like the Regulatory Sandbox, will drive innovation in credit, investments, and savings," said Joydip Gupta, head of Asia Pacific at Scienaptic AI.

“As India solidifies its position as a global manufacturing hub, the government’s focus on strengthening the electronics components ecosystem is both timely and essential. The recently announced $3 billion incentive scheme to boost local manufacturing of components is a welcome move, as it aligns with India’s goal of achieving self-reliance in electronics production. To unlock the full potential of this sector, it is crucial that the upcoming Union Budget provides further support through targeted measures aimed at expanding infrastructure, promoting R&D investments, and easing regulatory processes for manufacturers," said J S Gujral, Managing Director, Syrma SGS Technology.

"Budget 2025 presents an opportunity to accelerate MSME growth, affordable housing, and the expansion of the Unified Lending Interface (ULI). For MSMEs, easing lending norms and infusing liquidity remain critical. Expanding credit guarantee schemes and revising co-lending frameworks to include a wider range of NBFCs can bridge the sector’s ₹40 lakh crore credit gap. Targeted liquidity support will further strengthen small business financing. In affordable housing, revisiting lending caps and providing incentives for developers can boost accessibility. Adjustments in financing constraints will encourage supply and improve homeownership opportunities," said Joydip Gupta, head of Asia Pacific at Scienaptic AI.

"As the Union Budget 2025 approaches, the startup ecosystem looks forward to policies that can catalyze growth and innovation. Key priorities include expanding support for private incubators and accelerators, reducing high-tech infrastructure costs, and encouraging enterprise adoption of emerging technologies. Focused efforts to foster public-private partnerships, promote grassroots innovation, and provide access to advanced resources will be instrumental in driving India’s position as a global technology leader. Additionally, measures such as extending tax benefits, simplifying compliance, and improving credit access are essential to enable startups to scale sustainably. This budget offers an opportunity to shape a robust innovation ecosystem that empowers entrepreneurs and accelerates India's journey toward becoming a global hub for startups and technology-driven growth," said Jeenendra Bhandari, Chairman of JITO Incubation and Innovation Foundation (JIIF).

“The Union Budget 2025-26 presents a pivotal opportunity to address key challenges and stimulate growth across sectors integral to India’s economy, including agriculture, rice milling, and FMCG. Indicators in the FMCG sector remain muted, with softening urban consumption and slower growth in rural areas. Providing tax benefits and relief to individual taxpayers can boost disposable income, spurring consumer spending and revitalizing demand—an approach that aligns with industry recommendations for fostering economic activity," said Ayush Gupta, India Business Head, KRBL.

Budget 2025 presents an opportunity to accelerate MSME growth, affordable housing, and the expansion of the Unified Lending Interface (ULI).

"For MSMEs, easing lending norms and infusing liquidity remain critical. Expanding credit guarantee schemes and revising co-lending frameworks to include a wider range of NBFCs can bridge the sector’s ₹40 lakh crore credit gap. Targeted liquidity support will further strengthen small business financing," said Joydip Gupta, head of Asia Pacific at Scienaptic AI.

"The education sector anticipates increased funding for school education to strengthen infrastructure, alongside a focus on higher education in STEM fields with enhanced research and curriculum modernization. Support for internationalization, including subsidies for Indian students studying abroad, is expected to promote global exposure. Digital education may see investments in online platforms and micro-credential courses for accessibility," said V. N. Rajasekharan Pillai, Vice-Chancellor, Somaiya Vidyavihar University.