Union Budget 2025-26

“The current climate in Indian aviation is markedly pointed towards sustainability and increased connectivity. Last ​year saw the consolidation of Air India into an ambitiously placed airline, accompanied by Indigo’s expanding fleet ​and transformation in business model. In lieu of this, the industry expects this year’s budget to allocate funding towards the UDAN scheme, operationalising more ​greenfield airports, and sustainable fuel technology.​”

Ashish Chhawchharia​​
Partner and Aviation Industry Leader​​, Grant Thornton Bharat​​

“The coming Budget is likely to build on the announcements made last year and emphasise creation of hard and soft infrastructure, while addressing some concerns on the cost of doing business. Strategic investments in infrastructure and targeted reforms to reduce business costs could enable the government to build a strong foundation for sustainable and inclusive growth. The Budget is likely to propose significant capital expenditure in areas such as transportation, energy, and digital connectivity, alongside bolstering soft infrastructure, including education, healthcare, and skill development. Addressing the cost of doing business remains a critical concern. It is anticipated that the Budget will introduce measures aimed at streamlining regulatory frameworks, simplifying tax structures and providing incentives for small and medium-sized enterprises (SMEs). These are essential for fostering entrepreneurship, encouraging innovation, and enhancing the overall competitiveness of the Indian economy.”

Rishi Shah
Partner and Economic Advisory Leader, Grant Thornton Bharat

“India's overall macroeconomic stability is evident from its comfortable forex reserves of over USD 640.3 billion, covering over 8 months of import bills, a realised GDP growth of 6.4%, a manageable current account deficit of 1% of GDP, and inflationary trends within the range of 5%. The government's strategy is particularly noteworthy, with a focus on MSME importance as the middle ground, deregulation for MSMEs at the grassroots, and flexibility in labour working norms. Additionally, the emphasis on education and R&D, flexibility for educational institutions in course structuring, and encouragement of industry-government-academia interfaces are all pragmatic steps. Furthermore, initiatives in agriculture, such as land pooling to encourage collective and corporate farming, akin to the Kerala Navodhan model, and targeting micro-irrigation, address critical issues like marginal landholdings. Overall, these measures demonstrate a very apt and practical thinking approach.”

Padmanand V
Partner and Agriculture Industry Leader, Grant Thornton Bharat

“Given the limited allocation, we are still far away from seeing approval for Silicon fabs. Enhance financial incentives such as extending the PLI scheme, focus on R&D by allocating dedicated funds and invest in skilling and training programmes as well as infrastructure development. Develop critical semiconductor infrastructure such as fabrication plants (fabs), assembly, testing, marking, and packaging facilities, and outsourced semiconductor assembly and test units.”

Ramendra Verma
Partner and Government Consulting Leader, Grant Thornton Bharat

“India’s 2025 Budget is expected to focus strongly on climate action. The Government aims to meet its climate goals while supporting development. Increased funding for climate resilience and green infrastructure is likely.”

Manoj Bansal
Partner, Climate Change & Energy, Grant Thornton Bharat

“With the rupee depreciating and geopolitical challenges accentuating supply-side risks, inflation will remain a challenge. Fiscal policy must take the lead in stimulating growth without blowing the fiscal deficit out of control. Policies need to focus on achieving GDP growth north of 8.5% while incentivising private sector investments through public-private partnerships in areas like infrastructure, MSMEs, R&D, climate, ESG, and agriculture. Incentives such as subsidies, credit guarantees, refinancing, and tax breaks could be explored. Foreign capital will also be critical for addressing currency volatility and building FX reserves.”

Vivek Ramji Iyer
Partner and National Leader, Financial Services – Risk, Grant Thornton Bharat

“With the rupee depreciating and geopolitical challenges accentuating supply-side risks, inflation will remain a challenge. Fiscal policy must take the lead in stimulating growth without blowing the fiscal deficit out of control. Policies need to focus on achieving GDP growth north of 8.5% while incentivising private sector investments through public-private partnerships in areas like infrastructure, MSMEs, R&D, climate, ESG, and agriculture. Incentives such as subsidies, credit guarantees, refinancing, and tax breaks could be explored. Foreign capital will also be critical for addressing currency volatility and building FX reserves.”

Vivek Ramji Iyer
Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat

“Regulatory framework relaxations could be around three aspects: rationalisation regulatory reporting requirements; move to off site surveillance from on site inspections and; and a move to a more principle based regulation with industry self regulatory organisations playing a larger role in detailing out the operational aspects.”

Vivek Ramji Iyer
Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat

“Regulatory framework relaxations could be around three aspects: rationalisation regulatory reporting requirements; move to off site surveillance from on site inspections and; and a move to a more principle based regulation with industry self regulatory organisations playing a larger role in detailing out the operational aspects.”

Vivek Ramji Iyer
Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat

"India’s Global Capability Centres (GCCs) are evolving from support hubs to engines of global innovation and transformation - even leading global hubs for lot of large corporates. By driving cutting-edge research in AI, semiconductors, Pharma, and aerospace, - almost all industries are strengthening India’s role in the global ecosystem. With a deep STEM talent pool and expanding leadership roles, GCCs are not only shaping the future of industries but also creating high-value jobs and fostering technological self-reliance. Their continued growth will accelerate digital transformation, enhance global competitiveness, and position India as a key player in next-generation innovation. As businesses centralise strategic functions here or even move the entire piece to India, India’s GCCs will play a critical role in defining the future of global enterprises."

Jaspreet Singh
Partner and Cyber Advisory Leader, Grant Thornton Bharat

“Increasing healthcare spending to 2.5% of GDP is essential to strengthen infrastructure and expandaccess, particularly in underserved areas. This investment will enable the establishment andupgrade of facilities while advancing preventive care initiatives like immunisation drives and healthawareness programs to address health challenges at their root.”

Bhanu Prakash Kalmath S J
Partner and Healthcare Services Industry Leader, Grant Thornton Bharat

“Enhanced PLI support for the biotechnology sector will further accelerate growth in this sub-segment. In 2023-24, imports accounted for 60-65% of the country’s total API requirements, with a significant share sourced from China. Expanding the scope of the PLI scheme and extending incentives for greenfield projects can play a pivotal role in attracting investments and boosting manufacturing capacity in this critical sector.”

Bhanu Prakash Kalmath S J
Partner and Healthcare Services Industry Leader, Grant Thornton Bharat

“As the Government is aspiring to have “Insurance for all by 2047”, GST relief on protection products namely term life and health insurance will make the products more affordable for the end consumer thereby helping to increase penetration.”

Narendra Ganpule
Partner and FS Consulting and Insurance Industry Leader, Grant Thornton Bharat

“With the 2025 Union Budget coming up, India has an unparalleled opportunity to secure its position as a preferred manufacturing hub. India’s manufacturing sector has emerged as a vital pillar of the economy, driven by initiatives like the Production Linked Incentive (PLI) scheme, which has catalysed over $17 billion in investments across sectors, including electronics, automotive, and pharmaceuticals. This initiative has generated INR 11 trillion worth of production and created more than 1 million jobs, reflecting its transformative impact.”

Sachin Sharma
Partner, Tax, Grant Thornton Bharat

“The outlays for MSME programs, amounting to less than INR 10,000 crore, are disproportionately low compared to allocations for agriculture. There is a need to enhance outlays under the listed programmes such as micro & small enterprises cluster development programme (MSE-CDP) and raising and accelerating MSME performance (RAMP) programme.”

Padmanand V
Partner and Agriculture Industry Leader, Grant Thornton Bharat

“With SEBI introducing regulations for small and medium REITs, one would expect more traction in this space. It would therefore 
be relevant to enhance investor confidence by introducing capital gains exemptions for direct asset transfers and security swaps, aligning withholding tax rates for FPIs, and granting dividend tax exemptions to unitholders.”

Shabala Shinde
Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat

“One of the reasons for Indian companies investing abroad seems to be for strategic purposes. A control on ports and shipping lines has enabled them to cut down shipping times substantially.”

Rishi Shah
Partner and Economic Advisory Leader, Grant Thornton Bharat

“The forthcoming budget in India is anticipated to unveil the new Direct Tax Code 2025, a development that has generated considerable interest and discussion. Some of the key changes likely to be introduced in the direct tax code includes—Streamlining tax filing by reducing the number of sections and incorporating more schedules, simplifying taxpayer classification to residents and non-residents, eliminating categories such as ROR and RNOR., eliminating most deductions and exemptions to close loopholes and ensure a fairer tax system, expanding the scope of Tax Deducted and Collected at Source (TDS/TCS) to cover almost all income types, promoting regular tax payments and reducing evasion, taxing capital gains as regular income, which may result in higher taxes for some but ensures equal treatment of all income types, abolishing the concepts of “Assessment Year” and “Previous Year”, using only the “Financial Year” for tax filing, renaming income categories for clarity, with “Income from Salary” becoming “Employment Income” and “Income from Other Sources” becoming “Income from Residuary Sources.”

Akhil Chandna
Partner, Tax, Grant Thornton Bharat

“The revenue secretary, in a post-budget (2024) interaction, clarified that there is no intention to create a new direct tax code; only a comprehensive review of the existing Income-tax Act is contemplated. In a follow-up action, 22 specialised sub-committees have been constituted and the mandated task for these committees is to ensure the removal of redundant provisions and simplification of the Act, aimed at reducing litigation and compliances, widening the tax base, following global best practices. The government has also solicited inputs and suggestions from various stakeholders in October (2024) and 6,500 suggestions were received in a months' time.”

Riaz Thingna
Partner, Tax, Grant Thornton Bharat

“The government's focus should be on addressing specific issues like buyback taxation and providing incentives for emerging sectors such as startups, renewable energy, and artificial intelligence.ernment's focus should be on addressing specific issues like buyback taxation and providing incentives for emerging sectors such as startups, renewable energy, and artificial intelligence.”

Riaz Thingna
Partner, Tax, Grant Thornton Bharat

“The extension of SEZ tax holidays and the reinstatement of key export incentives will collectively support the growth and global competitiveness of India's IT and tech/AI industries.”

Raja Lahiri
Partner and Technology Industry Leader, Grant Thornton Bharat