Budget 2025 Expectations Live Updates on Nirmala Sitharaman's February 1 Speech & Income Tax News - [January 20 ]

The Union Budget 2025 will be a game-changer for India’s real estate sector, especially in bustling regions of Uttar Pradesh. Areas like Noida are seeing a surge in demand for commercial spaces. The rising demand for commercial properties in areas like Noida, spurred by transformative projects such as the Bayview Bhutani International Film City and Noida International Airport underscores the need for policies that further boost infrastructure and urban development. One major improvement could be introducing single-window clearance systems to fast-track project approvals. It’s a simple step that could save time and cut delays for commercial real estate projects. Another big opportunity lies in making it easier for foreign investors to invest in mixed-use and Grade-A office spaces. Tax breaks for green buildings and smart urban projects can attract global investors and elevate the region’s status as a commercial hub. With strategic government support, real estate can boost job creation and contribute to India’s $5 trillion economy vision.

As we look toward the Union Budget 2025, we expect the Finance Minister to introduce policies that foster sustainable growth in the housing sector, which will, in turn, help align industries like premium lifestyle and home solutions for broader development. A key focus should be on enhancing urban infrastructure, with dedicated funds for sustainable housing projects, smart cities, and eco-friendly home solutions. We anticipate that the Budget will introduce tax incentives for manufacturers focused on sustainability, encouraging the development of products that align with India’s environmental goals. Additionally, reducing GST on luxury home solutions is expected to make them more accessible, driving demand in this segment

The upcoming Budget will likely honour its commitment by substantially increasing agricultural R&D allocations, targeting an uplift from under 0.5% to at least 1% of agricultural GDP. Additionally, fertilizer reforms are anticipated as the government focuses on enhancing domestic production, particularly of nano-liquid urea, to stabilize prices and reduce import dependency.

The Budget is also expected to promote natural farming, self-sufficiency in pulses, shrimp production, and vegetable clusters to boost productivity and meet changing consumer demands. Moreover, a significant emphasis is likely to be placed on promoting biofuels and ethanol to support sustainable farming practices.

Budget 2025 will likely expand schemes such as “AgriStack”, which include digitalization across all sectors, along with its flagship scheme KCC. This would also streamline processes and eliminate existing trade barriers to ensure fair pricing for farmers.

The budget is likely to focus on agriculture infrastructure, with an emphasis on higher yields, agriculture cluster development, cold storage, warehousing, and supply chain improvements to reduce post-harvest losses and enhance market access, alongside measures for water management, climate change mitigation, and investments in technologies like solar pumps, drones, and precision farming to drive efficiency and innovation.

The flagship crop insurance scheme, Pradhan Mantri Fasal Bima Yojana, which saw unchanged allocation last year, might see a higher budget.

As India approaches the Union Budget, the nation faces a pivotal moment to balance rapid technological advancement with foundational needs. Amid the AI revolution, critical projects leveraging Geographic Information Systems and space tech for better governance, remain underfunded. GIS isn't just about mapping—it's a tool for disaster preparedness, land optimization, and sustainable urban planning. Without adequate investment with proper controls, initiatives like these risk falling behind, leaving gaps in environmental stewardship and governance precision.

Simultaneously, India's sustainability agenda is at a crossroads. While we pledge ambitious climate goals, budgetary allocations for wetland conservation, water resource management, and renewable energy lag dangerously behind. Neglecting these areas risks ecological collapse, undermining long-term growth. Artificial intelligence offers transformative potential, but its rapid adoption must not overshadow core priorities. AI must be harnessed to tackle challenges like climate resilience, sustainable agriculture, and urban development, not at the cost of environmental funding.

This budget must strike a balance—boosting funding for GIS, prioritizing sustainability, and directing AI innovation towards solving real-world problems. Progress cannot come at the expense of the planet. This is the moment to align India’s technological ambitions with its ecological and societal responsibilities.

We envision Bharat emerging as a global drone hub by 2030, and the Union Budget 2025 presents a pivotal opportunity to accelerate this journey. A key focus should be boosting the adoption of drones in the logistics sector, particularly in quick-commerce and e-commerce. With the rising demand for efficient last-mile delivery solutions, drone technology is poised to play a transformative role in meeting these needs. To realize this potential, we urge the government to foster an enabling ecosystem through targeted policy measures.

Tax exemptions or reduced GST rates on drone services, manufacturing, and maintenance would significantly lower operational costs, making drones more accessible for businesses. Expanding funding under the Production Linked Incentive (PLI) scheme to include drone services and infrastructure—such as drone ports—will further catalyze the sector’s growth.

Regulatory clarity is another critical area. Simplifying approvals for drone operations, especially for Beyond Visual Line of Sight (BVLOS) deliveries, will be instrumental in integrating drones into Bharat’s supply chains. A clear and predictable regulatory framework will encourage greater private-sector investment and innovation.

Additionally, we advocate for increased government support in research and development (R&D) and subsidies for pilot training programs to build a skilled workforce capable of driving this industry forward. Collaboration between policymakers, technology providers, and logistics stakeholders is essential to create a robust ecosystem that positions Bharat as a global leader in drone-powered commerce.

The Union Budget 2025 is a critical moment to unlock the vast potential of drones in logistics and beyond. With progressive policies and the right incentives, Bharat can solidify its position as a global drone hub, fueling innovation, economic growth, and technological leadership.

The Union Budget presents a pivotal opportunity to prioritise cybersecurity as a cornerstone of the nation’s economic and technological growth. In order to secure critical infrastructure, digital ecosystems, and citizen data, we anticipate measures that promote investments in vital security solutions to align with India’s vision for a safe and resilient digital economy.

Policies that further public-private collaboration, cybersecurity skill development, and strong regulatory frameworks will be essential given the increase in cyberthreats that target both the public & private sectors. With the implementation of the Digital Personal Data Protection (DPDP) Act, there is a clear imperative to strengthen frameworks for data protection norms. To realise the full potential of the DPDP Act, it would be reassuring to see budget policies that encourage adoption of advanced data protection technologies, promote investments in compliance infrastructure, and support awareness initiatives aimed at building a culture of data privacy.

As we look ahead towards the Union Budget 2025-26, we hope to see sustained improvement in India's startup and technology ecosystem. With startups being essential for promoting economic growth and innovation, several measures being taken to strengthen the startup realm. Specific policies may provide them the boost they need to grow and expand. Moreover, an emphasis on new technologies such as AI, IoT, and quantum computing can help create an environment conducive to entrepreneurship and innovation.  

Public-private partnerships (PPPs) and increasing investment in R&D can drive significant progress, particularly in important sectors such as watertech, agriculture, and healthcare, where startups are already providing impacting solutions. Strengthening digital infrastructure and simplifying regulatory processes can help businesses grow more efficiently.  

Financial support remains key. Providing access to funding through tax incentives, startup-focused loan programs, and venture capital investments can empower startups to scale their operations. Skill development in advanced technologies will ensure a strong talent pipeline, enabling Indian startups to compete globally.  

The upcoming Budget presents an opportunity to position India as a leading startup hub. Through supporting innovation and growth, it can drive sustainable development and help achieve the country’s goal of becoming a $5 trillion economy through technology and entrepreneurship.

The upcoming Union Budget has the potential to boost India's economic growth by addressing key areas focusing on the logistics infrastructure. To further strengthen the industrial base, we hope for implementation of imperative policies aimed at advancing the manufacturing, technology and logistics sectors.  

CJ Darcl envisions this budget to be a turning point for the logistics sector. We believe that continued allocation in multimodal transport systems and the development of inland waterways are vital for establishing resilient and efficient supply chains. As sustainability takes center stage, we expect the implementation of advanced policies that endorse green technologies and promote the integration of electric vehicles within the commercial fleet, utilisation of alternative fuel sources & renewable energy infrastructures enhancements, and subsidies/incentives for adopting sustainable operational methodologies. These measures can accelerate India's journey to become a global manufacturing hub.

Additionally, we expect the government to launch programs for workforce development driven via skill development programmes targeting developing industries and expanded training centers for logistics professionals. This budget is an opportunity to strengthen India's reputation as a strong economy that balances growth with inclusion, innovation and sustainability.

India is at a pivotal point in its economic trajectory. A combination of policy stability, deepening economic reforms, robust domestic consumption and favourable demographic dividend has led to India becoming the fifth-largest global economy with a GDP of around $4 trillion. In this revolutionising journey, AI and automation are expected to play transformative roles in industries such as manufacturing, logistics, and warehousing. These technologies improve efficiency, optimize operations, and lower costs, resulting in considerable prospects for growth.

We hope the Union Budget 2025 includes initiatives to encourage the deployment of AI and automation across industries. Tax breaks for deploying robotics and AI solutions, subsidies for technology-driven initiatives, and increased investment for R&D can all help to hasten this transformation. Furthermore, investing in skill development programs dedicated to AI and automation will prepare the workforce to accept these innovations. Furthermore, focusing on infrastructure development to support automation—such as smart factories and AI-powered supply chains—will allow industries to scale more effectively. India's goal to use technological advancements for the fair and human-centered development of businesses, economies, and society is in line with its support for a future in which technology acts as a bridge rather than a barrier.

The future of India’s flex space industry lies in a synergistic partnership between the government and the private sector. The government can play a pivotal role by introducing policy frameworks that encourage innovation—such as tax incentives, streamlined regulatory approvals, and interest subvention schemes to ease capital access for operators. Integrating flex spaces into urban development projects, like smart cities, IT parks, and transport hubs, will further bolster growth and establish them as a vital component of India’s economic infrastructure. 

At the same time, the private sector must rise to the challenge by delivering world-class, technology-driven workspace solutions that cater to the evolving needs of businesses and professionals. Investments in sustainable practices, digital infrastructure like 5G, and enhanced customer experiences will ensure long-term viability and competitiveness. When the public and private sectors collaborate with a shared vision, we can create an ecosystem that not only supports India’s economic ambitions but also redefines how businesses operate in the modern era.

The Union Budget 2025 presents an opportunity to further build on the digital economy and future-proof India's global competitiveness. The markets across the world are going through challenging times and that calls for safeguarding and protecting businesses in the best way possible. With the budget announcements, I am hopeful of holistic development and strong support for Research and Development (R&D) in overall digital infrastructure that includes Artificial Intelligence, Machine Learning, Quantum Computing, and Blockchain. Additionally, robust investment in workforce upskilling is essential to revolutionize the industry and drive India’s steady growth as a significant global tech hub.

"As the government moves forwards towards achieving USD2 Trillion exports by 2030, Budget 2025 must address the persistent liquidity challenges faced by exporters, particularly in the wake of ongoing geopolitical trade disruptions. Export credit has witnessed a decline over the past two years, making it imperative for targeted solutions like enhanced interest equalization schemes, simplified access to financing platforms, and broader support for trade credit insurance to mitigate risks.

With MSMEs contributing over 40% of India’s exports, we would expect policies that focus on increasing export credit growth, especially for this vital sector, are critical. Strengthening integration into global supply chains, addressing fragmentation, and promoting innovation within institutions like ECGC will not only improve credit accessibility but also boost India’s competitiveness in the global market. Digital Public Infrastructure like International Trade Financing Services (ITFS) with participants like Exporters, FIs and Trade Credit Insurers,  should be further augmented bActivating Insurers and Initiating Interest equalisation equivalent esp for MSMEs and encouraging Financiers like IBUs could be impactful innovative enablers.

Such measures, alongside a sustained push towards building seamless financial ecosystems, will ensure India’s export economy grows from USD 776 Billion to USD2 Trillion, unlocking significant opportunities for businesses across the country."

“As we approach Budget 2025, the government’s continued focus on the MSME sector is encouraging. This year, we expect an even stronger thrust on fostering MSME growth to achieve our $5 trillion economic vision.

To address the persistent credit gap for MSMEs, the budget should prioritize expanding the reach of collateral-free credit financing platform and reduce borrowing costs for small businesses.

Few enablers for this objective can be

·       Enabling seamless trade financing through policy support for trade credit insurance to boost working capital access for SMEs thereby enhance financial inclusion.

·       Enable TReDS to integrate with GST portal for validation of genuinety of invoice uploaded on TReDS by MSMEs and ease the Factoring of receivables of SMEs with out dependence on Buyers for approval.

·       Fasten the process of TReDS integration with GEM portal for expanding the reach of TReDS credit lines to MSMEs working for Government and Public sector companies.”

"As we look forward to the Union Budget 2025-26, it is imperative to prioritize measures that strengthen the digital financial ecosystem, particularly in rural India, where initiatives like Aadhaar Enabled Payment System (AePS) and Bharat Connect have become lifelines for millions. While AePS has revolutionized cash-in cash-out (CICO) operations, ensuring transaction safety and security remains a critical focus for the fintech ecosystem.

The framework put forth by Dvara Research highlights the need to integrate existing networks of Transactional Business Correspondents (TBCs) into the Digital Banking Unit (DBU) hierarchy. These TBCs are the true enablers of last-mile connectivity, providing uninterrupted banking access to underserved communities and reducing costs while fostering trust. Recognizing and supporting this network with technological upgrades and financial assistance would not only prevent duplication but also accelerate the pace of financial inclusion.

Additionally, a reduction or waiver of GST on financial services offered at Banking Agent outlets would significantly ease the financial burden on these grassroots operators, encouraging broader participation in rural banking. Beyond inclusion, the objective must evolve toward empowering rural communities with tools for savings, investments, and financial growth, fostering a self-reliant Bharat.

We hope this budget paves the way for robust, innovative, and inclusive financial policies that align with the aspirations of Digital India and truly reflect the transformative potential of integrating DBUs and TBCs into a unified framework."

“As the Union Budget 2025 draws near, there are significant expectations centered on simplifying compliance, resolving disputes, and enhancing India’s global competitiveness. Roadmap and enablers for complete and integrated digital overhaul of Customs processes, leading to reduction in manual errors and delays. The introduction of an Amnesty Scheme to address the backlog of pending Customs disputes is another key demand, inspired by the success of similar initiatives in VAT, Service Tax, and Income Tax. Rationalizing tariffs to address inverted duties remains critical to boosting domestic manufacturing under the 'Make in India' initiative. Stakeholders also expect a reduction in customs duties on renewable energy and EV components to support sustainability goals. Clarity on the Manufacture and Other Operations in Warehouse Regulations (‘MOOWR’), particularly on IGST applicability under the newly inserted Section 65A of the Customs Act, 1962, is eagerly awaited.

Additionally, there is a call for extending the Remission of Duties and Taxes on Export Products (‘RoDTEP’) incentives, which expired on December 31, 2024, for exports under Advance Authorisation (‘AA’), Export-Oriented Units (‘EOU’), and Special Economic Zones (‘SEZ’). Exporters are advocating for a longer-term, stable policy as interim relief through an internal circular only extends the scheme until January 14, 2025. Furthermore, the introduction of an incentive scheme like RoDTEP for service exporters and the simplification of Customs (Administration of Rules of Origin under Trade Agreements) (‘CAROTAR’) rules, including adherence to verification timelines and removal of bank guarantee requirements, are essential steps to improve the ‘ease of doing business’ index”.

“The Union Budget 2025 offers a significant opportunity to accelerate the adoption of health insurance and enhance financial security across India. By introducing additional sops and tax incentives for individuals and corporate entities, the budget can boost health insurance penetration, aligning with the national vision of achieving universal insurance coverage by 2047. This would ensure greater financial protection for all.

Targeted incentives for corporate entities to provide enhanced employee benefits, such as comprehensive health insurance plans, can further strengthen the country’s economic resilience. Additionally, with the increasing frequency of natural disasters, promoting disaster resilience through incentives for catastrophe insurance products can facilitate timely recovery and reduce financial losses, particularly in high-risk regions. Our vision at Lockton India, is to provide innovative insurance solutions and believe that progressive reforms in this budget can enable the insurance sector to play a crucial role in creating a secure and inclusive future.”

The construction industry is a key driver of India’s economic growth, but fragmented supply chains pose a risk of delays. Ahead of Budget 2025, the sector seeks support for technology-driven solutions to streamline these supply chains and incentives for companies in the platform-play space to strengthen the industry. Incentives for sustainable practices will align growth with environmental goals, while innovative financing can unlock large-scale infrastructure projects. Encouraging private capital investment and sustained government infrastructure spending, particularly in Tier 2 and Tier 3 cities, will drive demand and unlock growth potential for the construction industry. Stabilizing raw material prices through subsidies or reduced import duties will help ease financial pressures. Granting industry status to real estate would simplify financing, streamline regulations, and boost investor confidence. Interest rate cuts, which can increase liquidity and encourage demand, along with the announcement of PLI schemes and tax breaks for manufacturing setups, should also be prioritized.

Views of Mr. George Alexander Muthoot, MD of Muthoot Finance

The forthcoming union budget is poised to chart the course for the new Indian government’s economic growth agenda. On the back of the political stability and resilient economy, it is expected to provide relief to various sections of the society and benefits for various sectors. The budget 2025 has the opportunity to help provide the NBFC sector and retail investors with the much needed impetus. 

Below are a few recommendations where government support will go a long way in providing last-mile credit.

Wishlist as a gold loan NBFC

As a prominent player in this sector, we would like to continue to advocate to provide cushion and offer maximum benefit to customers by urging the government to grant eligible gold loan NBFCs with ‘priority sector status’. We believe that providing priority sector status to eligible gold loans NBFCs will be a step forward in driving financial inclusion as it majorly impacts the small borrowers whose borrowing needs are frequently less than Rs 50,000. 

We also propose for a ‘Gold linked credit line via UPI’ that can go a long way in helping households/small business owners meet their financing needs and monetise idle gold jewellery. Once the NBFCs are allowed to link with the UPI payment system, this will act as a secured credit that would be extended by NBFCs at a lower interest rate (12%-18%) compared to the high interest rates (around 36%) charged by credit cards.

We further seek a level playing field by bridging the disparity and aligning the single counterparty exposure limits for gold loan NBFCs in comparison with other NBFCs i.e. 20% of Tier-1 capital. This restriction impacts the ability to lend credit and negatively impacts our potential customers.

Wishlist for our retail NCD investors

With the growing impetus on diversifying the funding mix of NBFCs, we would urge the regulators and government to simplify the taxation compliance on the TDS on listed NCDs which is currently at 10% TDS. The selling and re-selling of listed NCDs through stock exchanges ends up putting a taxation burden on the end investor. Since the TDS were introduced on listed securities keeping in mind that the customers are not paying the tax, however on ground there is an adequate trail of holders and interest payments. 

Our other recommendation is for allowing additional interest rate on Public Issue of Secured Non-Convertible Debentures (NCDs) issued to retail investors, pensioners and senior citizens over and above the interest rate applicable to institutional investors. We believe these regulations are crucial in order to attract more retail investors and ensure fair compensations to all our investors and stakeholders.

Punit Shah, Partner, Dhruva Advisors: “Budget 2025 holds immense potential to redefine housing affordability for first-time buyers. By combining targeted tax benefits, innovative financial incentives, and streamlined regulatory reforms, the government can create a robust framework that encourages homeownership. Addressing critical issues such as higher interest deductions, incentivizing states to reduce stamp duties, and promoting green housing can significantly ease the burden on new buyers. Furthermore, enhancing affordable housing definitions and reinstating deductions like Section 80EEA can broaden the scope of benefits.

On the regulatory front, empowering homebuyers through the Insolvency and Bankruptcy Code (IBC) and expediting resolutions for stalled projects will be instrumental in rebuilding trust in the real estate sector. Increased allocations to the SWAMIH fund and strengthening the National Company Law Tribunal could further ensure timely project completions, reducing uncertainties.

Together, these measures can align with the nation’s vision of 'Housing for All,' ensuring affordability, sustainability, and confidence for first-time homebuyers”.