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Mixed Reactions: On the 'Treasure Trove' that the Union Budget 2025-2026 Appears to be like!

While the MSMEs and the Indian start-ups are relying on the announcements made, Railways, higher education, emplyment and a few states like Kerala, Telangana were not in much focus in the budget presented by the FM.

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If beauty actually just lied in the eyes of the beholder, the budget tabled in the parliament on Saturday could have been a beauty that people would have loved to cherish, given the hopeful eyes that were fixated on this announcement. However, the budget has witnessed a mixed response from sectors since Saturday after the announcement, which included some of the major announcements for the poll-bound Bihar, even as no income tax up to Rs. 12 Lakh captured the attention of the middle class. 

The Union Budget, often referred to as the annual financial statement, is a statement that contains the estimated receipts and expenditures of the government for that particular year. The budget is classified into Revenue Budget and Capital Budget, which allocates funds and includes important announcements on the roadmap for the financial year, which runs from April 1 to March 31. The union budget for 2025-2026 has been announced by Nirmala Sitharaman, the Minister of Finance and Corporate Affairs of India.

MSMEs and Indian Start-ups relying on the announcements

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For the Indian startup, for which the Budget seems like a boom, the announcements have been varied. Bruce Keith, Co founder CEO, InvestorAi says, "The extensions to the loan programs make sense in the context of micro-enterprises. However, the crucial fund of funds of Rs. 10,000 crore will play a key role in boosting domestic capital in the startup sector."

On similar lines, Sridhar Parthasarathy, Co-Founder & General Partner at Bluehill, mentions that the "government’s announcement of another Fund of Funds (FoF) worth Rs. 10,000 crores in the budget is a strong commitment to cultivating an entrepreneurial ecosystem and an acknowledgement of Alternative Investment Funds (AIFs) in channelling these resources effectively". Showing optimism towards the Budget, Mr. Parthasarathy adds, "The introduction of a credit guarantee will help startups achieve a balanced mix of equity and debt funding, making their growth more sustainable."

Stating that the ask of the Indian start-ups was a "better credit platform and framework for start-ups", Ankur Mittal, Co-founder of Inflection Point Ventures, says that the budget is a "welcome step". "Their (start-ups) capacity to attract follow-on growth capital will be further strengthened by the additional cash, which will also help them make important investments in operations, personnel, and technology," he says. 

While the MSMEs have received positive announcements for the credit scheme, Jigar Kirtibhai Patel, Managing Director of G3+ Fashion, believes that the Budget "offers a unique proposition for the growth of Indian MSMEs and job creation". “The forward-looking perspective to support Indian MSMEs is a commendable initiative as these businesses account for over 45% of the country’s total exports. The budget positions Indian MSMEs with enhanced scalability prospects, technological upgradation, capital accessibility, investment and turnover growth — contributing towards their long-term success. As MSMEs grow, they will also provide millions of new employment opportunities for Indian youth, directly impacting India's per capita GDP going forward, helping to meet the country’s target to become a developed nation by 2047.”

Focusing on women in entrepreneurship, the budget has introduced a dedicated scheme for 5 lakh first-time entrepreneurs from women, SC, and ST communities, on which Sakshi Shah, Founder of GoodLives, says, "What stands out even more is the dedicated support for first-time women and underrepresented entrepreneurs. Building a business requires not just capital but also confidence, and this initiative will encourage more diverse voices to enter the entrepreneurial space."

Easy merger process for businesses welcomed

To ease the process of mergers between companies, the budget has made special provisions that have been welcomed by the industry. "A High-Level Committee for Regulatory Reforms will be set up for a review of all non-financial sector regulations. The objective is to strengthen trust-based economic governance and enhance ‘ease of doing business’, especially in matters of inspections and compliances. The government is also planning to rationalise the requirements and procedures for speedy approval of company mergers and widen the scope of fast-track mergers. This will simplify the overall approval process," Sandeep Agrawal, Director and Founder of Teamlease Regtech, says.

A light for the EV sector

As the lithium gets cheaper following the budget, Dinesh Arjun, CEO Cofounder, Raptee.HV, a 2-wheeler EV, says, "A crucial boost to the EV industry comes with the exemption of Li-Ion batteries and other capital goods, which will significantly reduce battery costs and encourage further investment in domestic battery manufacturing. Given that batteries make up 30-40% of an EV’s cost, this move will make EVs more affordable and accessible to consumers, driving mass adoption across two-wheelers, three-wheelers, and four-wheelers alike. By addressing a fundamental cost barrier, this initiative lays a strong foundation for the future of electric mobility in India."

Prashant Bora, MD & CEO of OTEK (A Bora Multicorp Venture), highlighted the significance of these measures, saying, “The FM’s proposal to reduce the customs duty on open cells and other critical electronics components to 5% will help boost the Make in India initiative. This will help electronics brands to support customers with more cost-effective pricing, leading to enhanced scalability and growth. Furthermore, the budget’s emphasis on positioning India’s aspirations to become a global electronics hub through the production-linked incentive (PLI) schemes for electronics and IT hardware manufacturing, further boosted by PM Narendra Modi’s target of $500 billion by FY30, coupled with the government’s bid to strengthen India’s startup ecosystem with an additional INR 10,000 crore Fund of Funds will be a catalyst for growth going forward.”

Hospitality eyeing growth and laments disappointments alike

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Commenting on the tourism and hospitality industry, Mr. Arjun says that the budget "sets the stage for transformative growth". "The government's plan to develop 50 top tourist destinations in partnership with states is a game-changer, ensuring smart infrastructure development while empowering states to create world-class destinations through a challenge-based model. Additionally, bringing hotels under the harmonised master list of infrastructure is a significant step toward attracting private investment and enhancing the overall hospitality experience. At the same time, initiatives such as skill development programs, MUDRA loans for homestays, and improved connectivity will open new opportunities for local communities and small businesses."

Amidst the ongoing Mahakumbh and the rising spiritual tourism, this budget has focused on heritage and medical tourism, raising hopes in the hospitality industry. Saurabh Gahoi, Senior Vice president of Ramee Group of hotels, says, "Key measures include enhancing connectivity to major tourist destinations, offering performance-linked incentives to states for better destination management, and improving tourist amenities and cleanliness. Additionally, the introduction of streamlined e-visa facilities and visa-fee waivers for select groups is set to boost inbound travel." On the other hand, he also mentioned that domestic and spiritual tourism is set to flourish. "As supported by the revised income tax reforms that encourage travel within the country, a major boost has also come from intensive skill-development programs, particularly in Institutes of Hospitality Management, ensuring world-class training for the youth," he adds.

Since the budget focused on the labour-intensive sector (footwear and leather), Pranav Rungta Co-founder and Director of Nksha restaurant and Vice President of NRAI Mumbai shows disappointment saying, "We were disappointed that our sector was not considered a labour-intensive sector (like Footwear and Leather), whereas we are the second largest employer in the services sector currently employing close to 9 million people directly." Showing hope with the income tax exemption that might leave people with the expenditure for consumption, he still mentioned that the restaurant industry "hoped the government would have realised that tourists need food too, and the importance of boosting the Restaurant Sector too", saying "Our long-standing demand for Industry status has been overlooked for years." For now, he is looking forward to the GST Council for the announcements and says, "We hope going forward the GST Council will also keep in mind our demand for allowance of Input Credit, which is the single largest problem plaguing our growth. Overall a mixed-bag budget for the Restaurant Sector."

Budget amidst the low consumption demand 

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While the Indian economy is facing low consumption demand, both urban and poor, the budget seems to be an important instrument to present the roadmap. However, the major decision taken on this front is the cap for the income tax until Rs. 12 Lakh. Commenting on the same, Viral Kagrana, Finance head of NeoNiche Integrated Solutions Pvt Ltd, says, "A long waiting booster finally comes to the Middle Class of the Indian Population along with focusing on supporting long term sustainable economic growth driven by Agriculture, MSME, Investment and Exports. By exempting incomes from Rs. 7 Lakhs to Rs. 12 Lakhs, putting back money in the pocket of the people, thereby boosting their disposable income and overall consumption of the economy."

Hoping for the consumption demand to grow, Jagrut Kotecha, Chief Executive Officer, PepsiCo India & South Asia, says, "The budget is focused on an income-led economic revival that will provide relief to the middle-income group through policies designed to infuse liquidity into the economy. The measures introduced should alleviate the burden of inflation and rising living costs, bringing much-needed relief to consumers and in turn help in stimulating overall consumption." 

Dheeraj Arora, Managing Director & CEO, Hygienic Research Institute, Pvt. Ltd says, "With income tax relief aimed at enhancing disposable income, we anticipate a surge in consumption, which will directly accelerate demand. The government's strategic initiatives, including reduced tariffs and easier credit access, are designed to streamline supply chains and lower input costs."

Prima facie, Satyen Momaya, CEO, Celio India, says, "The Union Budget 2025-2026 sets the stage for a stronger resilient economy, the current biggest challenge is the slowdown of the pvt consumption, the tax change for the salaried class could positively benefit the middle class to some extent also the budget outlines various initiatives to make tax compliance easier for businesses." 

Railway budget remains same while UDAN Scehem raises hope

With the Railways having witnessed major incidents and accidents, expected major announcements, the budget allocated for it remains constant at Rs. 2.65 lakh crore, making the experts raise concern. However, with the announcement about the expansion of the UDAN scheme, the logistics sector is hopeful. "The introduction of BharatTradeNet is a significant step towards digitising trade processes, enhancing supply chain efficiency, and aligning with global best practices. Additionally, the focus on air cargo infrastructure upgradation and streamlined cargo screening and customs protocols will improve turnaround time, boost efficiency, and support high-value and perishable cargo movement. The National Manufacturing Mission is set to drive higher logistics demand, while the Modified UDAN Scheme, expanding connectivity to 120 more destinations, will strengthen air cargo networks and improve access to hinterland markets," Balfour Manuel, Managing Director, Blue Dart, says.

On major announcements for the healthcare industry

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This year's budget has included an announcement for 200 daycare cancer centres in district hospitals, which has been welcomed by the healthcare industry. Dr. PN Arora, CMD, Yashoda Super Speciality Hospitals, Kaushambi, says. "This initiative will significantly improve early detection and treatment accessibility, particularly in underserved regions," he adds. The budget has also included the customs duty exemption for 36 life-saving drugs and has announced an expansion for medical education by adding 10,000 medical seats in 2025-26, with the aim of adding 75,000 seats in the next five years. "It presents a broader vision to strengthen the healthcare workforce and promote innovation in healthcare delivery. We anticipate further reforms in the coming years to make healthcare facilities more affordable and accessible to all," Dr. Arora says.

Yogesh Mudras, Managing Director of Informa Markets in India, says,“With 36 new life-saving drugs added to the exemption list, this move will significantly benefit patients while also boosting domestic manufacturing." Highlighting the focus on medical tourism, he further says, "The strong emphasis on medical tourism and promotion of the “Heal in India” initiative in collaboration with the private sector reinforces the government’s commitment to position India as a global hub for healthcare services. These policy decisions will help create a strong ecosystem for both treatment and innovation in the pharmaceutical sector.”

Amit Gupta, MD & Founder of Leeford Healthcare, highlights the potential impact of the 'Heal in India' initiative announcement in the budget, saying, "The initiative, backed by a Rs 20,000 crore boost for tourism, is a smart move as it will not only attract medical tourists but also showcase India as a hub for affordable, high-quality healthcare."  

On initiatives in Agriculture and dissatisfaction on high taxes on ultra-processed food

The Union Budget 2025, which includes several initiatives for the agriculture sector, has drawn the attention of key stakeholders. "The introduction of the Developing Agri Districts Programme, alongside initiatives for crop diversification, irrigation, and enhanced credit access, will directly benefit 1.7 crore farmers, strengthening India’s agricultural backbone. The Budget paves the way for a resilient, self-reliant agricultural economy, ensuring long-term prosperity for both farmers and consumers, " says Ayush Gupta, Business Head, India, at KRBL Limited.

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Detailing further, Saurabh Wadkar, Founder of  Rooted, a gourmet Indian meal subscription service, says, "The Dhan Dhanya Krishi Yojana and the focus on self-sufficiency in pulses will stabilise supply chains, ensure fair pricing for farmers, and build a more resilient food ecosystem. Establishing the National Institute of Food Technology (an announcement for Bihar) is a step in the right direction—it will not only boost food innovation and processing but also cultivate the next generation of entrepreneurs and skilled professionals in this space."

However, that being said, Mr. Wadkar laments, "Taxation remains an area that requires urgent reform. High GST rates on processed foods and compliance challenges continue to slow down growth. This budget lays the foundation, but the real test lies in execution. India is on the brink of an entrepreneurial revolution—the right policies, if implemented well, can propel businesses into an era of unprecedented growth."

Allotment for higher education remains low, but focus on AI

Talking about the announcement for the Atal Tinkering labs, Praneet Mungali, Educationist and Trustee, Sanskriti Group of Schools, says, "It is a welcome move to see the focus on innovation via more Atal Tinkering labs and additional infrastructure for STEM learning, especially for AI. We are at the dawn of the AI epoch, and the only way for our country to become a developed nation is to stay in lockstep with the new technologies, whether it is AI or quantum computing."

Healthcare for gig workers

A positive response has been dropped in over the major annoucemrntd for the gig workers being provided the insurance cover. "With provisions for identity cards, the budget has provided registration on e–sharm portal and insurance coverage. This will benefit nearly 1 crore gig workers. These progressive reforms will accelerate India’s journey towards Viksit Bharat," Sandeep Agrawal Director and Founder of Teamlease Regtech says.

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