All posts by Sujata Achary

1. Overall view on Budget, 2025:

•  “The Union Budget 2025-26 demonstrates a balanced and strategic approach towards India’s continued economic development. It effectively lays out a comprehensive roadmap for sustainable growth while maintaining fiscal prudence – a crucial balance needed at this juncture of our nation’s progress.
•  The government’s enhanced focus on GYAN (Garib, Yuva, Annadata, and Nari Shakti) is particularly commendable, as it addresses core segments that form the backbone of our economy. The targeted interventions in agriculture, healthcare, investments, exports, and MSME, show promise in boosting rural income and creating new opportunities. These sector-specific initiatives are likely to contribute significantly to our country’s overall economic resilience.
•  We anticipate positive outcomes from the proposed income tax rates, particularly the advantage extended to middle class individuals earning up to ₹12 lakhs. This reform reflects the government’s commitment to supporting the middle class while maintaining a progressive tax structure.
•  From a life insurance industry perspective, the increase in FDI limits in the insurance sector is positive in attracting fresh capital inflows that will enhance industry competitiveness, drive innovation, and expand insurance accessibility. As government initiatives boost income levels across Bharat, we expect to see increased financial awareness and capability among citizens to invest in their long-term financial security. This aligns perfectly with our mission at Bajaj Allianz Life to extend life protection to every Indian household in alignment with Government’s vision of insurance for all by 2047.
•  The government’s strong push for rural development, including increased investment in agri-infrastructure, digital connectivity, and financial empowerment, will create a more conducive environment for financial security solutions. As rural incomes rise and financial awareness deepens, the demand for life insurance is expected to grow, ensuring better protection for families across Bharat. At Bajaj Allianz Life, we remain committed to leveraging these enabling conditions to expand insurance accessibility and provide comprehensive financial protection to individuals across the country.”

2) Impact of new tax regime on business:

•  “Over the years, customers have become more financially aware and no longer view life insurance solely as a tax-saving tool. They recognize its value as a powerful and versatile financial instrument for long-term security. With the industry continuously innovating and reinventing itself with simple and relevant products, life insurance is naturally becoming an integral part of their financial portfolios.
•  The regulator has also introduced a slew of reforms to ensure there’s increased awareness, accessibility and affordability. They are all directed towards customers getting optimum value from life insurance products. Therefore, customers are increasingly looking beyond just tax benefits when purchasing life insurance and this should not impact the life insurance sector.”

3) Change in definition of capital assets with respect to ULIPs:

•  “The proposed clarification on ULIP taxation is a welcome step towards greater transparency and consistency in tax treatment. ULIPs where aggregate annual premium is less than ₹2.5 lakhs and do not qualify for exemption under Section 10(10D) are now proposed to be defined as capital assets and taxed as capital gains instead of applicable slab tax rates.
•  This shift from taxation under ‘income from other sources’ to capital gains brings more clarity and fairness, reinforcing ULIPs as a compelling long-term investment option. We view this as a progressive move that will enhance customer confidence and encourage disciplined financial planning. At Bajaj Allianz Life, we remain committed to offering innovative insurance and investment solutions that align with evolving regulations and policyholder needs.”

4) Change in FDI Limits:

•  “The Union Budget has clearly focused on driving consumption led growth and foster inclusive development. A key highlight is the increase in the FDI limit in the insurance sector from 74% to 100%, a move set to bring in fresh capital and bolster the industry’s financial strength. The decision reflects the government’s continued commitment to making India a prime investment hub for stable, long-term capital.
•  Greater foreign participation, will accelerate the adoption of global best practices, introduce innovative products, and elevate customer service standards. Additionally, the mandate to invest premiums within India ensures that these funds contribute to domestic economic growth and infrastructure development.
•  The next five years present a significant and an exciting opportunity to propel the industry forward onto greater heights.

Vivek Merchant, Director, Swan Defence and Heavy Industries Limited:

“The Union Budget 2025-26 sends a strong message about India’s ambitions in shipbuilding and maritime infrastructure. The ₹25,000 crore Maritime Development Fund is a game-changer, signaling the government’s serious intent to make India a global hub for shipbuilding. This investment, coupled with the push for port-led development and logistics efficiency, will drive growth for companies like ours. The ₹1.5 trillion allocation for infrastructure development is another positive step, ensuring better connectivity for shipyards and ports, which is crucial for scaling up operations.

However, the industry still needs policy reforms that encourage private sector participation and reduce dependency on imports for critical components. A clear roadmap for defence shipbuilding and incentives for indigenous manufacturing will further strengthen India’s maritime ambitions. The increased defence budget allocation and emphasis on modernization present a significant opportunity for private players in the defence sector. Encouraging strategic partnerships and fostering a robust domestic ecosystem for naval defence manufacturing will be key to enhancing India’s self-reliance in maritime security.

At Swan Defence and Heavy Industries, we are excited about these developments and look forward to leveraging these opportunities to contribute to India’s self-reliance in shipbuilding, maritime defence, and overall strategic capability.”

Rohit Mehrotra, Co-founder of Organic Tattva:

The budget announced today opens on a positive note with a focus on empowering farmers. Agricultural reforms aiming to strengthen supply chains, promote balanced nutrition, and enhance food security, & indirectly curbing long-term food inflation. This will support lower yields, boosting financial sector resilience to better sustain the broader economy. The launch of six-year mission to increase pulses and cotton production, will help to reduce import dependency. The inclusion of enhanced credit guarantee coverage for small and medium enterprises and an 8% increase in subsidies for food, fertilizer, cooking gas and infrastructure development aims to boost agricultural productivity, support farmer’s financial well-being.

 

Mr. V. P. Nandakumar, MD & CEO at Manappuram Finance Ltd

“As Prime Minister Narendra Modi wished, Goddess Lakshmi has blessed the middle class, with Finance Minister Nirmala Sitharaman announcing a large-sized tax relief for this burgeoning population segment in her eighth consecutive budget. The income tax exemption up to ₹12 lakh per annum makes immense economic sense. The tax reduction will put significant amounts of money into the hands of the middle class, whose propensity to consume and save is very high. This will considerably boost private final consumption and household savings, which will add to economic momentum.
It must be remembered that the shrinking Private Final Consumption Expenditure, was the main factor behind the moderation in economic growth in the recent months.”

K. Paul Thomas, MD & CEO, ESAF Small Finance Bank

The Finance Minister’s emphasis on inclusive development in the Union Budget 2025-26, similar to the Government’s focus, clearly articulating ‘Inclusivity’ as the guiding principle, is highly welcome.

Initiatives such as the Grameen Credit Score, the enhancement of the KCC loan limit from ₹3 lahks to ₹5 lahks, and the introduction of Credit Cards for Micro Enterprises are key announcements that advance the cause of inclusivity. Digital Public Infrastructure receives a boost with the announcement of ‘BharatTradeNet’ (BTN) for international trade, which will serve as a unified platform for trade documentation and financing solutions, along with a revamped Central KYC Registry.

The exemption of income tax on annual incomes up to ₹12 lakh is a significant benefit, empowering middle-income households and boosting disposable income in both urban and rural markets.

Therefore, the Union Budget 2025-26 not only sustains the current economic growth but also lays a strong foundation for future growth and development.

Viral Kagrana, Finance Head of Neoniche Integrated Solutions

A long-waiting booster finally comes to the Middle Class of the Indian Population along with focusing of supporting to long-term sustainable economic growth driven by Agriculture, MSME, Investment, and Exports.

By exempting incomes from Rs 7 Lakhs to Rs 12 Lakhs putting back money in the pocket of the people there by boosting their disposable income and overall consumption of the economy.

Such a move will drive the engine for the coming years and resolve long awaiting benefits to the Middle-Class Indian Citizens.

Along with a focus on the Fiscal deficit goal to take the waves of economic global uncertainty and instabilities in parts of the world, it was great to see a boost in labor-intensive sectors such as food processors, textile, leather, and toys that are positioned to boost employment and skill development.

Also, the government continues its commitment to support MSME growth in the economy by focusing on ease of doing business whereas giving business benefits of the government scheme and access to credit thereby setting up the foundation for entrepreneurial culture in the ecosystem–

Budget Reaction from Mr Leo Peter Charles, Founder & Managing Director at Jane Solutions -Supply Chain Management Company:

“In a major push for India’s maritime sector, Finance Minister Nirmala Sitharaman announced new provisions and facilities to enhance shipbuilding in India as part of the Union Budget 2025. This initiative is set to improve supply chain efficiency and strengthen the country’s logistics network.

With improved shipbuilding capabilities, India can expand its shipping fleet, reduce dependency on foreign vessels, and lower logistics costs. This will particularly benefit fisheries and agri-export sectors, ensuring faster, more cost-effective global trade. Strengthening domestic shipbuilding also supports port infrastructure and coastal connectivity, boosting India’s trade competitiveness worldwide.”

Budget Reaction from Mr Harsh Talwar, Founder & CEO, Cashforphone- Online Retail Tech Startup Company:

“The 2025 Budget holds promising avenues for startups and the retail industry, especially those companies that specialize in sustainable and technology-based services such as mobile phone recycling, repair, and resale. The incorporation period of five years for startups and an increased Credit Guarantee Scheme of ₹20 crore will provide much-needed financial support to emerging businesses and spur innovation and growth in the circular economy.

The removal of TCS on certain transactions, coupled with the simplification of tax compliance, will ease complexity in operations, thereby making business transactions in the refurbished mobile phone market smoother. Reducing the BCD on crucial minerals such as lithium-ion battery waste and scrap, as done by the government, is a step in the right direction and is likely to fortify the electronics recycling industry, in general, to use resources appropriately and sustainably.

This budget further cements India’s commitment to developing a robust, technology-driven retail ecosystem by pushing ease of doing business and further reinforcing financial support for startups. We look forward to using these reforms to drive the adoption of refurbished and recycled mobile devices into a wider consumer base while supporting India’s green economy.”

Venkatraman Venkateswaran, Group President & CFO, Federal Bank

It is a growth-oriented budget, focusing on our journey towards Viksit Bharat. Labor-intensive sectors like agriculture, footwear, leather, toys, and food processing, which are largely MSME sectors, have received a boost. This budget complements our focus on the MSME sector and presents an opportunity to further strengthen our relationship with customers and finance their growth. The personal income tax rate reduction also provides a boost from the consumption side.

The fiscal consolidation roadmap outlined last year stays the course, and government capex spending will provide impetus for infrastructure and job creation.
In summary, it is a balanced budget with a boost to consumption

Dhanpat Nahata, Managing Partner, Essar Capital:

“Given the current geopolitical landscape, India needed a decisive and forward-looking fiscal roadmap to maintain its position as one of the world’s fastest-growing economies. With the fiscal deficit targeted at 4.8% of GDP for FY25 and a structured plan to reduce it in the coming years, this budget sets the foundation for sustainable growth, fostering economic stability and ensuring India remains resilient in the global market.”

Srinivasan Vaidyanathan, Operating Partner, Essar Capital:

“The 2025 Union Budget effectively balances fiscal discipline with targeted, strategic investments. By focusing on critical sectors such as maritime, energy transition, and mining, the government is laying the groundwork for a ‘Viksit Bharat.’ These investments will also foster innovation and job creation, ensuring that economic growth remains resilient, sustainable, and inclusive.”

Chandigarh February 3, 2025, New Delhi: The Union Budget 2025 outlines a transformative agenda that addresses our economy’s immediate needs while paving the way for a sustainable future. This budget reflects our government’s commitment to the common man of India, ensuring that every citizen can thrive in a rapidly evolving landscape. The government’s strategic planning for this budget reflects a deep understanding of the challenges faced by our society. The proposed development measures in the Budget 2025 span broad areas focusing on enabling employment-led development, investing in people, economy, and innovation, and taking everyone together on an inclusive growth plan.

Discussing the budget, Shri Jayant Chaudhary, Hon’ble Minister of State (I/C), Ministry of Skill Development and Entrepreneurship (MSDE) and Minister of State, Ministry of Education, Govt. of India said “The Union Budget 2025 reflects a forward-looking vision that not only strengthens economic growth through tax reforms but also prioritizes key sectors driving India’s future. From enhancing Kisan Credit Card limits and boosting cotton productivity to empowering startups and MSMEs through credit guarantees, these measures will accelerate entrepreneurship and rural prosperity. The focus on deep tech funding, AI-driven education, and five Centers of Excellence in skills underscores India’s commitment to a future-ready workforce. Additionally, expanding medical education, strengthening cancer care at district hospitals, and ensuring social security for gig workers demonstrate a balanced approach to inclusive development. This Budget paves the way for a more skilled, resilient, and self-reliant India.”

The govt. is prioritizing inclusive growth, with targeted measures that uplift underprivileged communities, empower women, and support our farmers. It is also a big win for the individual taxpayers as they provide strength to the economy and to recognize their contribution, the government has provided relaxation to the middle class by exempting tax on income up to Rs. 12 lahks.

There has been a commendable focus on Skilling and Education in the Union Budget 2025. From nourishing children & mothers with Saksham Anganwadi & Poshan 2.0 to fostering innovation with 50k Atal Tinkering Labs, boosting digital learning with BharatNet & language resources, and strengthening skill development & IITs this has been a truly transformative budget for our future.

National Centres of Excellence for Skilling

The government will set up five National Centres of Excellence for Skilling with global expertise and partnerships to equip youth with the skills required for the “Make for India, Make for the World” initiative, focusing on curriculum design, trainer training, and a robust skills certification framework.

National Framework for Global Capability Centres (GCC)

A national framework will guide states in promoting Global Capability Centres in Tier 2 cities, enhancing talent availability and infrastructure while facilitating industry collaboration.

Fund of Funds for Startups

With a corpus of Rs 10,000 crore, our Fund of Funds for Startups will nurture over 1.5 lakh recognized startups, providing crucial capital across various stages and reducing reliance on foreign funding.

Centre of Excellence in AI for Education

The govt. are also establishing a Centre of Excellence in AI for Education with an investment of Rs. 500 crores to revolutionize learning accessibility.

Employment-led Growth Initiatives

To drive employment-led growth, we will implement intensive skill development programs and provide Mudra loans for home stays, enhance travel connectivity, and offer performance-linked incentives to states.

Skilling emerges as a cornerstone across all these initiatives, reinforcing the government’s commitment to fostering an environment where every individual has the opportunity to develop their skills, contribute meaningfully to the economy, and uplift their communities. The initiatives outlined include the scheme to establish India as a global hub for toys and support for 5 lakh first-time women, SC, and ST entrepreneurs, focusing on online capacity building and entrepreneurship training. Additionally, the ‘Rural Prosperity and Resilience’ program aims to combat underemployment in agriculture by providing targeted skilling and investment, empowering rural communities to thrive locally.

So, this budget is not merely about fiscal allocations; it lays a foundation for inclusive growth and sustainable development. As India strives towards becoming a ‘Viksit Bharat’, it is vital to foster an environment where every Indian can realize their potential and contribute to India’s progress and the possibilities that lie ahead.