Beyond tax relief: Centre through Budget 2025 has given a fillip to infra, startups, and MSMEs, says Jamshyd Godrej

BUDGET 2025-26 comes at a defining moment for India. As the global economy grapples with uncertainty, India stands resilient, poised to reinforce its position as a key driver of global growth. With GDP projected to expand between 6.3% and 6.8%, the Budget builds on the momentum by addressing the needs of all segments of the society — including the economically disadvantaged, youth, farmers, and women — while strengthening the pillars of manufacturing, innovation, sustainability, and employment generation.

Balancing fiscal prudence with economic stimulus, the Budget lays a strong foundation for India’s transformation into a global manufacturing and technology hub. It also prioritises empowering MSMEs, start-ups, and the digital workforce — critical engines of economic progress.

Boosting consumption to drive growth: A notable step towards stimulating domestic consumption is the revision of income-tax slabs, ensuring that no tax is payable on earnings up to ₹12 lakh. This measure alleviates financial pressures on the middle class, allowing households to retain a larger share of their income and, in turn, boosting spending power.

Beyond direct income relief, tax reforms addressing capital gains taxation encourage greater participation in equity markets, real estate, and other asset classes, fostering long-term wealth creation. Additionally, modifications in tax deducted at source (TDS) and tax collected at source (TCS) enhance disposable income across diverse streams.

As individuals experience improved post-tax returns on investments, consumer confidence rises, setting the stage for sustained economic growth.

Expanding employment, strengthening MSMEs: The Budget bolsters MSMEs and startups by easing access to capital and enabling scalability. Reclassification of MSMEs and an expanded Credit Guarantee Scheme help mitigate financial constraints, while targeted funding supports startups in scaling operations and advancing technology. MSMEs are a major source of employment, and their growth will create more job opportunities.

Encouraging growth in labour-intensive, export-oriented sectors such as leather goods, toys, and food processing is a welcome move. Additionally, efforts to integrate Indian businesses into global supply chains, alongside regulatory reforms in the Jan Vishwas Bill 2.0, will streamline operations and enhance ease of doing business.

Accelerating energy transition for sustainable growth: A defining feature of this Budget is its commitment to clean energy and sustainability. The ₹20,000-crore investment in small modular reactors under the Nuclear Energy Mission is a crucial step towards energy security. Incentives for manufacturing solar panels, EV batteries, and wind turbines will accelerate the country’s transition to renewable energy and fortify its position in the global clean energy landscape.

Strengthening capital formation for growth: Prioritising long-term economic resilience, the Budget boosts infrastructure investment to drive growth. Enhancing regional connectivity, streamlining logistics and improving warehousing will increase efficiency and attract private capital. Incentives for green technology and tax reforms further position India as a hub for sustainable industrial development and robust economic expansion.

A future-ready and inclusive India: Budget 2025 lays the groundwork for India’s continued ascent in an evolving global economy. By fostering manufacturing, empowering MSMEs, accelerating clean energy adoption, investing in skilling and encouraging capital formation, the government is shaping an India that is both globally competitive and environmentally responsible. As businesses, we must align with this vision — prioritising innovation, sustainability, and workforce development. The road ahead presents immense opportunities, and through strategic tie-ups and responsible growth, we can unlock India’s full potential on the world stage.

(Views are personal)