Union Budget Expectations 2025 From Industry Leaders Across Sectors

India's ambition of achieving a USD 7 trillion economy by 2030 is intrinsically linked to strategic, long-term infrastructure development. The Union Budget 2025's emphasis on this sector is therefore crucial. Currently, as we have discussed at length in the Rubix Industry Insights—Logistics report, India's logistics costs are estimated at 13%–14% of GDP, significantly higher than the global average of around 8%. 

Efficient logistics, improved connectivity (including digital infrastructure), and modernised infrastructure can significantly reduce these costs, creating a more competitive business environment. This is especially important if we want to break into the Top 25 of the World Bank’s Global Logistics Performance Index. For MSMEs, which contribute approximately 30% to India's GDP and account for roughly 40% of exports, this translates to reduced operational costs, improved supply chain efficiency, and access to wider markets, both domestic and international. 

The 2025 Union Budget is expected to lay the groundwork for economic progress and help shape the trajectory for multiple industries and sectors. With India’s startup ecosystem witnessing a surge in the past year, the Government's commitment to supporting innovation and building domestic capacities is commendable.

As per industry reports, 2024 brought in a rise in India’s software spending which is projected to increase at its highest annual growth rate by 17% in 2025. In terms of the Smart TV OS industry, fresh breakthroughs at the intersection of Advertising, Tech, and Marketing such as the Connected TV boom, fuel curiosity for how the upcoming budget will impact opportunities and global competitiveness.

As a homegrown brand, we have faced the challenges of competing with global giants and we believe that there is a need for the introduction of policies that prioritize and support local companies dedicated to building solutions for India. We strongly believe that decisive actions will play a key role in developing the sector.
 

Looking ahead to the Union Budget 2025-26, a more holistic and strategic approach is essential for the continued growth of India’s EV sector. While initiatives like the PM E-Drive are commendable, the sector now requires further support in key areas such as infrastructure development and financing solutions. The upcoming budget should prioritize creating a conducive ecosystem that not only supports the adoption of electric vehicles but also makes them a viable and accessible option for consumers. These measures will be crucial in driving the next phase of EV uptake across the country

The government is set to present the Budget in a few days, and we expect it to be growth-oriented. The government's track record for the last ten years clearly shows that although there is so much excitement surrounding the Budget, it is business as usual for the government. This is because many of their path-breaking policy announcements have been made outside the Budget. The government's agenda for the next two to three years will be to prioritize growth, and the measures to be announced will reflect this focus while ensuring the maintenance of fiscal prudence.”

On the topic of investment reforms, Himanshu highlighted industry expectations: “There is an expectation from the industry that the government will reinstate the indexation benefit for debt mutual funds. It is difficult to say if this change will happen, but if it becomes a reality, it will once again make debt mutual funds a more attractive investment option than fixed deposits, helping investors achieve a real rate of return on their fixed-income investments.

In the run-up to the FY 2025-26 Budget, the microfinance industry stands expects certain support from the Government. Sector's ability to serve the underbanked across 723 districts and its role in ensuring that the growth is inclusive, is well known. The sector contributes 2.03% to India's GVA and serves 8 crore low income clients, we're not just talking about financial services – we're discussing the backbone of grassroots economic empowerment. The 1.3 crore jobs we support tell only part of the story. The real narrative lies in the millions of dreams we help realize through financial inclusion.

We're particularly keen to see budget provisions that can help the sector grow sustainably. At present, the sector is going through liquidity constraints and the sector will be greatly benefitted if a dedicated refinance facility is created for the sector. It has been a long standing demand. The Credit Guarantee Scheme launched by the Government in 2021 helped the sector attract bank funding and was critical in ensuring credit flow to clients during COVID. A similar scheme needs to be restarted. Both these measures will also help lower the cost of funds as well as ensure uninterrupted supply of credit to the underserved.

India’s GDP is projected to grow beyond the 6% mark for the seventh consecutive year—a remarkable testament to the country’s resilience and economic momentum. Yet, building a truly Viksit Bharat —a nation that thrives both economically and socially—calls for significantly expanding funding for critical areas of development work, be it building resilient infrastructure, advancing climate change adaptation strategies, or accelerating rural development to bridge socio-economic gaps and empower the backbone of India’s economy. 

At a systemic level, India must prioritise the creation of robust institutions dedicated to nation-building. Higher education institutions play a pivotal role in this journey by reimagining traditional models of learning and embracing innovative, interdisciplinary approaches. These institutions must be equipped to address the complex challenges of development management, sustainability, and social equity. These institutions must receive unwavering support to lead the way in redefining the future of education and nation building.

The huge USD 300 bn Global Online Games Industry (4 times the size of the Movie + Music industry together) has the potential to contribute significantly, for several decades, to India's GDP growth and jobs, like IT has done. Negatives like addiction can be mitigated through use of "smart tech". 

The massive 1400% increase in GST in October 2023 ostensibly introduced from a moralistic perspective, has not met its objectives as it has only caused 83% of Indian player spends on Online Games to migrate  from Indian platforms to "no tax"  offshore (mainly Chinese) platforms. 

Over the past 15 months it has been impossible to block offshore platforms due to "domain farming" or get them to register and pay taxes in India. There is an urgent need to address the elephant in the room (abnormally high taxes) and correct the situation, through the "review" mechanism that the Finance Ministry had promised the industry.

The changes in Budget 2024 with respect to REITs and InvITs are welcome from the point of view of Indian capital markets growing up to be more globally competitive. By lowering the long-term capital gains treatment holding period, the government is recognizing implicitly the development in these instruments and the salience of the same in funneling investments into critical sectors of the economy. This will increasingly make these more attractive to foreign institutional investors, for whom at an earlier stage, longer statutory holding periods had to be observed. 

Better attractiveness will just lead to a virtuous cycle of more listings, better liquidity, and possibly lower cost of capital for real estate and infrastructure companies. The fact of the matter, however, is that the changes do not alter the intrinsic risk profile of the investments. REITs and InvITs are exposed to general market risks, interest rate variations, and sectoral challenges. Investors should look further into doing due diligence and classifying their appetite for risks. The lower holding period should be looked upon as an opportunity for better portfolio management rather than an opportunity to indulge in speculative, short-term trading.

The reducing to 12 months the holding period for claiming of long-term capital gain for both REITs/InvITs will be a game-changer provision for the investor community. This amendment will significantly enhance the liquidity and flexibility of these instruments, making REITs a far more attractive opportunity for a larger cross-section of investors.

 By equating the period of holding with the listed equity share, it addresses the demand for a level-playing platform and ensures wider retail participation in asset classes like real estate and infrastructure through a transparent route. This will lead to more market-friendly dynamics for overall REITs/InvITs, possibly reflecting better fundraising capabilities to such sectors.

In addition to better price discovery, in such a case, a reduced turnaround time is also possible. However, prospective investors should be wary of a complete analysis of the fundamental aspects of an investment, going beyond short-term tax factors. After all, the actual essence of both the REITs and InvITs is the ability to generate a relatively more stable return over time from high-quality underlying assets. The tax advantage is admittedly rather compelling, but it should be considered as an added value only and not the primary reason for investment in these assets.

In this post-pandemic era, we have seen significant growth in the co-working space due to organizations 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 organizations across cities where people are looking for cost effective yet employee friendly spaces.

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

As the pharma sector gears up for the upcoming budget, there are key areas where government support can drive growth and global competitiveness.
Firstly, an expansion of the PLI scheme to include investments in APIs reliant on imported starting materials and critical raw materials would significantly enhance India’s self-reliance in this critical sector.

Secondly, incentivizing R&D through success-based fee support can promote research into cost-efficient processes, green manufacturing, and innovative drug development, which are essential for long-term sustainability.

Simplifying compliance through a single-window reporting mechanism would streamline operations for manufacturers, further enhancing ease of doing business.
Investment in pharma parks with centralized utilities like power, water, steam, and ETP services can substantially reduce project costs, as these account for up to 60% of setup investments.
Tax reforms, including lower corporate income tax rates, would make Indian manufacturers more competitive globally and encourage further investments.

Lastly, greater export support, particularly for MSMEs entering regulated markets, can be a game-changer. Reimbursement of USFDA and other regulatory inspection fees, conditional on successful inspections and achieving export thresholds, would encourage more players to establish world-class facilities, boosting exports and strengthening India's presence in global markets

Budget Expectations from the Industry's leaders is live now.