Union Budget 2025 Expectations: Expectation from the Tech Industry in 2025

Purusharth Malik, a Tech, Smartphones, and digital Marketing Expert, commented on the expectations of the Union Budget:" Simplifying compliance processes for businesses and rationalizing GST rates would not only streamline operations but also enhance the ease of doing business. Incentivizing sectors such as technology, MSMEs, and sustainable energy can create opportunities for growth and employment generation."

"Introducing policies to support startups in emerging domains like AI, IoT, and green tech would further strengthen India's global competitiveness. Infrastructure development, coupled with individual tax relief under the new tax regime, could spur domestic consumption and investment, driving holistic economic progress," Purusharth Malik further said.

Mukul Goyal, Co-Founder of Stratefix Consulting said, "The upcoming budget offers a critical opportunity to empower MSMEs and startups, which are central to India’s economic growth. While the recently introduced credit guarantee scheme is a welcome step, there is an urgent need for a Working Capital Support Guarantee to address liquidity challenges, especially for MSMEs managing day-to-day operations. Export-oriented MSMEs, contributing nearly 49% of India’s exports, could particularly benefit from tailored credit access and interest subsidies. Simplified compliance structures and faster grievance redressal systems would further reduce operational burdens and improve efficiency.

To enable MSMEs to thrive in the digital economy, the government should launch a Digital Acceleration Fund, providing interest-free loans or grants for AI, IoT, and cloud adoption. Additionally, initiatives like the Skill 2.0 Initiative and Skill Credits could bridge the growing skill gap by encouraging MSMEs to invest in upskilling their workforce in emerging technologies. These measures would enhance employability and help MSMEs compete globally.

Fostering innovation is equally crucial. Offering R&D tax credits and establishing sector-specific innovation hubs, particularly in manufacturing and agri-tech, can promote entrepreneurship and sustainable growth. These hubs could provide resources, mentorship, and funding for startups, especially in Tier-2 and Tier-3 cities, boosting local economies.

Addressing GST compliance challenges is also essential. Easing norms, raising the mandatory e-invoicing threshold, and harmonizing input tax credits would help MSMEs manage cash flows better. Revising GST slabs for essential raw materials would further reduce input costs and improve margins.

By addressing these critical areas, the budget can create a robust ecosystem for MSMEs and startups, driving innovation, digital transformation, and sustainable growth. This comprehensive approach will enable these sectors to contribute significantly to India's $5 trillion economy vision."

The real estate sector, especially the affordable housing one has not received any recognition in the past, and they have not been at the same level of other sectors for so long. Providing both developers and institutions the training to obtain affordable rates such as 200-300 basic points could help them reduce their capital rate. Moreover, revisiting the previously provided 100% tax exemption on affordable housing projects would encourage and facilitate many developers into targeting this particular space. Such a shift would allow us to resolve the current, where we observe only 25% of new launches in the affordable sector even when it has 70% of potential buyers, said Anurag Goel, Director, Goel Ganga Developments

The tax cut on housing loan interest should be increased to a maximum of ₹5 lakh as this will assist the middleclass significantly. The proposed increase from ₹2 lakh will allow expenses from over ₹700 to all the way to ₹90,000. As a result, tax expenditure will greatly decrease and moving home will become significantly cheaper. With EMIs being at an all time high of 8.5 to 9% this increase will greatly assist the middle class especially those looking to invest in tier 2 and tier 3 cities. Because of this, we predict that the demand for affordable housing would increase by at least 30% during the next financial year, says  Aman Gupta, Director, RPS Group

In addition to the requests mentioned above, the industry is also calling for the creation of a dedicated "India Fintech Fund" for non-priority sector lending. This fund would mirror the existing funds managed by the National Bank for Agriculture and Rural Development (NABARD).

Jatinder Handoo, CEO of the Digital Lenders Association of India (DLAI), explained that such a fund would provide essential support to fintech businesses that are struggling to secure commercial financing, especially during their early stages. "This would provide crucial support to fintech businesses struggling to secure commercial finance in their early stages," Handoo added.

• Continued credit guarantee allocations for MSME lending.
• A refinance window managed by the Small Industries Development Bank of India (SIDBI).
• An exemption from tax deducted at source (TDS) on interest payments to NBFCs, aligning them with the treatment for banks.

Union Budget 2025: As India awaits Union Finance Minister Nirmala Sitharaman’s budget speech on February 1st, speculations are rife about potential tax rebates for those earning up to Rs 15 lakh annually. Apart from this, there are expectations surrounding cryptocurrency, among other things.

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Fintech founders are urging the government to introduce measures that would make credit more accessible and affordable. Bala Parthasarathy, Chairman of Freo, a fintech startup, emphasized the importance of making cheaper credit available to boost the growth of fintech companies. “All companies want more growth. It is important that fintechs get more access to cheaper credit through budgetary measures,” he stated.

The Congress leader outlined several measures to address the economic slowdown:

Income Support for the Poor: Direct assistance to alleviate economic hardships.

Higher MGNREGA Wages: Boosting rural employment and income levels.

Increased MSPs: Providing relief to farmers.

Simplified GST Regime: Overhauling the “comically complex” system to make it more equitable.

Income Tax Relief: Easing the burden on the middle class.

Private investment growth, particularly in Gross Fixed Capital Formation (GFCF), has slowed to 6.4% this year from 9% last year. Ramesh noted that private sector announcements for new projects fell by 21% between FY23 and FY24, signaling a lack of confidence in the Indian economy.

Ramesh pointed to declining consumption as a critical issue, with Private Final Consumption Expenditure (PFCE) growth slowing from 7.4% in Q1 FY24 to 6% in Q2. He cited a "shrinking middle class" and falling car sales as evidence of India’s consumption crisis, which is dragging GDP growth and private sector investment.

The advance estimates project GDP growth for 2024-25 at 6.4%, a sharp decline from the 8.2% growth recorded in FY24 and even lower than the RBI’s revised estimate of 6.6%. "India’s growth story has hit a wall, particularly in the manufacturing sector, which remains stagnant," Ramesh said.

AICC General Secretary Jairam Ramesh has sounded the alarm over India’s slowing GDP growth, setting a “gloomy backdrop” for the upcoming Union Budget. He stressed on the need for radical action to address growth slowdown, stagnant consumption, and low private investment.

Tuhin Kanta Pandey, the current DIPAM secretary and a seasoned 1987-batch IAS officer of the Odisha cadre, was appointed as the new revenue secretary.

Chawla will also hold additional responsibilities as Secretary of the Department of Public Enterprises and the Ministry of Culture until regular appointments are made.

In a strategic move ahead of the Union Budget on February 1, the Finance Ministry underwent a key reshuffle. Senior IAS officer Arunish Chawla, who had been serving as the revenue secretary since December 25, 2024, was reassigned to head the Department of Investment and Public Asset Management (DIPAM).

Focusing on his home state of Assam, Gogoi shed light on its 31st rank in the Human Development Index, citing growing socio-economic disparity. He criticized Chief Minister Himanta Biswa Sarma’s wealth rank—9th among the wealthiest CMs in India—despite Assam’s languishing progress.

Gogoi also expressed doubts about the transparency and effectiveness of the state’s flagship investment summit, 'Advantage Assam 2.0.' He claimed that of the 63 projects announced under the first 'Advantage Assam' program in 2018, only 10 were completed, with the fate of the remaining projects unclear. He urged the government to provide a thorough assessment of prior commitments before making new promises.

Calling for a revamped GST system, Gogoi stressed the importance of a more equitable tax structure that aligns with the aspirations and challenges of the middle class.

Gogoi highlighted that 64% of GST revenue in 2021-22 came from the bottom 50% of the population, whereas only 3% was contributed by the top 10%. "The current GST framework unfairly burdens hardworking citizens while the ultra-wealthy contribute negligible amounts," he said.

The Congress MP also pointed to the 2019 corporate tax cuts amounting to ₹2 lakh crore, which he alleged primarily benefited wealthy corporations, further exacerbating inequality. "While big businesses enjoy reduced taxes, levies on essential goods continue to rise, adding to the economic struggles of ordinary Indians," he remarked.

Congress MP Gaurav Gogoi, during a press conference on Thursday, called for a significant overhaul of the Goods and Services Tax (GST) structure to provide much-needed relief to India’s middle and lower-middle classes. As the Deputy Leader of Congress in the Lok Sabha, Gogoi criticized the ruling BJP government for favoring the affluent while placing a disproportionate tax burden on ordinary citizens.

As the countdown to the Union Budget begins, the political and economic landscape is abuzz with action. Congress has stepped up its critique of the government, demanding a revamp of the GST framework, citing its disproportionate burden on the middle and lower-middle classes. The party has also flagged concerns about slowing GDP growth, shrinking household savings, and stagnant private investments.

Meanwhile, a significant reshuffle in the Finance Ministry has added another layer of intrigue. With Arunish Chawla reassigned to DIPAM and Tuhin Kanta Pandey stepping in as Revenue Secretary, the government appears to be gearing up for a crucial financial season.

Stay tuned to Moneycontrol as we bring you real-time updates, expert insights, and in-depth analysis on all the developments on Budget 2025.