Union Budget 2025 Expectations: Market Volatility, Tax Cuts, Flexi Loans Buzzwords As Experts Await February 1

As the Union Budget 2025 approaches, industry leaders from diverse sectors emphasize the need for transformative reforms to address economic challenges and unlock India’s growth potential. From enhancing rural financial inclusion and streamlining logistics to fostering innovation in crypto and technology, the upcoming budget presents an opportunity to shape the future of India’s economy amid evolving global dynamics.

Key Highlights from Previous Budgets

The previous budget set the groundwork for innovation and growth, but industry leaders now demand a sharper focus on execution. 

Building on 2024’s initiatives, which allocated Rs 6,000 crore for emerging technologies, expanded logistics under PM Gati Shakti, and introduced stricter crypto taxation, this year’s focus is expected to emphasize financial inclusion, regulatory clarity, and innovation. 

With calls to support rural NBFCs, streamline logistics, incentivize long-term investments, and reform crypto policies, the upcoming budget holds the potential to shape India’s economic trajectory in an increasingly competitive global landscape.

Let’s understand the viewpoints of the industry’s experts on budget expectations. 

Navigating Market Challenges Amid Economic Headwinds

Vinod Nair, Head of Research at Geojit Financial Services, painted a cautious picture for the Indian market, highlighting key challenges like the recent GDP growth downgrade to 6.4 per cent for FY25 and modest Q3 corporate earnings projections. He pointed out that persistent Foreign Institutional Investor (FII) selling, spurred by high valuations and global uncertainties, continues to weigh heavily on market sentiment. 

Nair added that strengthening US bond yields and a rising dollar have further dampened investor confidence. However, he sees a silver lining in the IT sector's promising early Q3 results, which could set the tone for broader corporate earnings.

 Market volatility, he said, will persist as investors react to macroeconomic data like inflation and industrial production, along with global cues such as US labour and inflation trends.

NBFCs Call for Priority Sector Recognition

Mathew Muthoottu, Managing Director of Muthoottu Mini Financiers, emphasized the pivotal role of Non-Banking Financial Companies (NBFCs) in serving rural India. 

Highlighting that NBFCs offer flexible loans up to Rs 3 lakhs for agricultural and small-scale needs, he called for their inclusion in the priority sector to enable lower-cost bank lending.

Muthoottu argued that such a move could empower rural communities, improve financial inclusion, and bolster the broader economy. With nearly 65 per cent of India’s population living in rural areas, addressing their financial needs through strengthened NBFCs could have transformative impacts.

Transforming Logistics for Economic Growth

Gayomard Driver, Executive Director of Jeena and Company, urged the government to focus on efficiency and innovation in logistics. He called for simplifying GST, speeding up multi-modal logistics park projects, and incentivizing green logistics to align with the National Logistics Policy.

Driver also stressed the need for skill development in the logistics sector to remain competitive in an increasingly tech-driven landscape. With India's logistics market projected to grow at a CAGR of 8 per cent and reach $380 billion by 2025, these reforms could significantly enhance sectoral efficiency.

Investor-Friendly Policies for Wealth Creation

Mayank Bhatnagar, Co-founder and COO of FinEdge, emphasized the need for budget measures that encourage long-term wealth creation. He suggested expanding tax incentives on equity-linked investments like mutual funds and simplifying tax laws to align with global standards.

Bhatnagar also called for reforms in long-term capital gains tax structures and policies incentivizing investments in asset classes that create sustainable wealth. A forward-looking budget, he noted, would deepen participation in equity markets and promote disciplined financial planning among retail investors.

Crypto Industry Seeks Regulatory Clarity

Raj Karkara, COO of ZebPay, highlighted the need for progressive crypto policies. He urged the government to revisit the 30 per cent   tax on crypto income and the 1 per cent   TDS mechanism, both of which he argued have stifled liquidity and trading volumes.

Karkara also advocated for recognizing crypto as a formal asset class with clear regulations to safeguard investors and foster industry growth. He pointed out that India could position itself as a global blockchain hub by offering tax breaks and subsidies for blockchain and Web3 startups. 

The crypto market, with a user base of over 15 million in India, has immense potential if supported by transparent and innovation-friendly policies.

Union Budget 2025: Collective Vision 

From boosting rural financial inclusion through NBFCs to streamlining logistics and creating investor-friendly environments, industry leaders are united in their call for a forward-looking Union Budget 2025. The emphasis on regulatory clarity, innovation, and long-term growth strategies reflects the sectors’ readiness to contribute to India’s economic transformation.