Union Budget 2025: Building a resilient and inclusive economy

The government is committed to renewable energy, setting a target to achieve 100 GW of nuclear energy capacity by 2047 — a 12-fold increase over the next two decades. While the push towards nuclear energy is a positive move, the absence of specific green hydrogen incentives and the lack of extension for the PLI scheme may hinder India’s ability to meet its ambitious net-zero targets. However, greater policy emphasis on sustainability is needed, with clear incentives for green hydrogen and continued support for the PLI scheme to drive innovation in clean energy.

• Agriculture and rural development: The Budget's focus on agriculture and rural development is a much-needed step towards improving farm productivity and promoting sustainable agricultural practices. Enhancing the Kisan Credit Card system is also a welcome move to support rural entrepreneurship. However, the government must maintain its focus on the effective implementation of credit access schemes to mitigate the risk of rising NPAs in the agricultural sector.
• MSMEs & financial inclusion: The Budget aims to support MSMEs by improving credit access, helping them scale up, innovate, and generate more employment opportunities for the youth. However, the government must establish strong mechanisms to monitor credit use and prevent defaults. Updating KYC systems and digitising trade documentation will improve financial access and reduce operational inefficiencies for MSMEs.

The government is focusing on infrastructure development, particularly in urban and rural areas, to drive inclusive growth. Expanding tap water coverage and supporting affordable housing through the SWAMIH Fund 2 are crucial steps. Additionally, the UDAN scheme and airport expansions offer promising opportunities for regional growth.

The Budget's healthcare reforms will enhance accessibility, especially in rural areas, with new cancer care centres and increased medical seats to improve the doctor-patient ratio. Extending the Ayushman Bharat PMJAY Scheme to gig workers will provide health coverage to millions. Moreover, with digital connectivity under BharatNet, India can adopt telemedicine solutions at scale, but digital literacy, particularly in rural areas, needs to be addressed to maximise these benefits.

The Budget provides a strong foundation for India’s technology sector, enhancing competitiveness in AI, semiconductors, and automation. Initiatives like the National Geospatial Mission, BharatTradeNet, and expanded GCCs aim to boost digital infrastructure and trade, positioning India as a global tech hub.

By leveraging MDB funding, the government will strengthen infrastructure development, regional growth, and financial inclusion. These initiatives are expected to strengthen India's financial ecosystem, accelerate economic growth, and enhance global competitiveness.

The 25% presumptive tax rate for foreign branches in electronics manufacturing will attract global players and reduce reliance on imports. The Budget’s measures will attract global investment, reduce import reliance, and promote domestic manufacturing while lowering BCD on ethernet switches to expand digital infrastructure. 

The government has established a high-level committee to review and update existing regulations, keeping pace with technological innovation and enhancing the ease of doing business.