Budget 2025 Live Updates: Third engine of growth - Investing in people
Update: 2025-02-01 11:40 IST
Union Budget 2025 Live Updates: The Finance Minister emphasised investment as the third engine of growth, which includes investing in people, the economy, and innovation. As part of investing in people, the government is focusing on the Sashakt Anganwadi and Poshan 2.0 programs, which provide nutritional support to over 8 crore children, pregnant women, lactating mothers, and around 20 lakh adolescent girls in aspirational districts and the Northeast region. The cost norms for these programs will be enhanced.
Big announcements for the second engine of growth - MSMEs
Moving to MSMEs, the second engine of growth, the focus will be on the 5.7 crore MSMEs, which include over one crore registered businesses employing 7.5 crore people and contributing 36% to India’s manufacturing. These MSMEs are crucial in positioning India as a global manufacturing hub, responsible for 45% of the nation's exports. To boost their growth and efficiency, the government will enhance the investment and turnover limits for MSMEs, increasing them by 2.5 times and 2 times, respectively. This move is expected to empower MSMEs to scale up, innovate, and generate more employment opportunities for the youth.
Big KCC announcement - loan limit increased
Union Budget 2025 Live Updates: The Finance Minister announced that Kisan Credit Cards (KCC) will continue to facilitate short-term loans for 7.7 crore farmers, fishermen, and dairy farmers. Additionally, the loan limit under the modified interest subvention scheme will be increased from ₹3,000 to ₹5,000 for loans taken through the KCC, providing greater financial support for agricultural production.
The Finance Minister announced that the government will launch a 6-year mission aimed at achieving self-reliance in pulses, with a special focus on tur and masoor. Central agencies such as NAFED and NCCF will be prepared to procure these three pulses from farmers who register with the agencies and enter into agreements. This initiative will run over the next four years, ensuring support and guaranteed procurement for farmers.
The Finance Minister outlined specific proposals, starting with agriculture as a key focus. Under the Prime Minister Krishi Yojana, a new initiative inspired by the success of the Aspirational District Programme, the government will launch an agricultural district programme in partnership with states. This will target 100 districts with low productivity, moderate crop intensity, and below-average credit parameters.
The program aims to boost agricultural productivity through crop diversification, sustainable farming practices, enhancing post-harvest storage at the Panchayat and block levels, improving irrigation facilities, and facilitating access to both long-term and short-term credit. This initiative is expected to benefit 1.7 crore farmers.
The key domains covered in the Union Budget include taxation, power, urban development, mining, the financial sector, and regulatory reforms. These areas are central to the government's focus on driving growth, improving infrastructure, enhancing governance, and ensuring sustainable development across various sectors.
No Income Tax upto Rs 12 lakhs
| S. No. | Quotes |
| 1 | Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat The repurposing of India Post into a major logistics organisation will create a public marketplace platform, which can be leveraged to promote the sachetisation of financial services, thereby broadening financial coverage. Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat Providing healthcare to gig workers through the e-Shram portal is a major positive for digital natives, including the fintech sector. This recognition, through the extension of healthcare, will bring formal social acceptance to workers who have otherwise faced challenges within their respective communities. Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat The focus on the four engines of growth—agriculture, MSMEs, investments, and exports—will create rising credit needs that must be met by a broader and more robust financial system. This opens the door for the issuance of more universal bank licenses and the granting of Small Finance Bank licenses to urban and rural co-operative banks. |
| 2 | Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat The government's five-year mission to enhance cotton productivity with high-quality, long-staple varieties is a game-changer for India’s textile industry. As the world’s second-largest cotton producer, India’s textile and apparel exports stood at USD 35.87 billion in FY24, accounting for 8% of total merchandise exports. However, India continues to import cotton to bridge the demand-supply gap, affecting cost competitiveness. By boosting domestic productivity, this initiative will stabilize raw material availability, reduce import dependence, and enhance the global competitiveness of India’s textile sector, where 80% of capacity is driven by MSMEs. With textiles contributing 2.3% to GDP and employing over 45 million people, this mission aligns with India’s broader strategy to strengthen manufacturing and exports. Successful implementation will reinforce India’s position as a key global supplier while supporting the transition to high-value cotton-based products. Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat Indian Toy market is highly fragmented with nearly 90% production being conducted by MSME.. With a focus on of making India a toy hub and a focus on MSME growth will give a massive boost to the Toy Industry and will further enhance acceptability of Indian toys in the global market India’s toy exports slipped slightly to USD 152.34 million in FY24, highlighting the need for a more robust strategy to boost global competitiveness. While initiatives like Make in India and Aatmanirbhar Bharat have improved domestic production, the export performance shows room for growth. Strengthening MSMEs, fostering innovation, and enhancing quality standards are crucial steps. The market for toys is huge and varied worldwide, and consumers are increasingly choosing safe and eco-friendly toys. Indian toys have become very popular due to their distinctive designs and cultural appeal, especially the traditional wooden and handcrafted ones. |
| 3 | Bhanu Prakash Kalmath S J, Partner and Partner and Healthcare Industry Leader, Grant Thornton Bharat Broadband connectivity will be extended to all Primary Healthcare Centres. According to the Economic Survey Report 2024-25, 5G services are now available in 779 out of 783 districts. This will support telemedicine (e-Sanjeevini) and enable technology and AI-driven medical solutions across India, contributing to the achievement of Universal Health Coverage. |
| 4 | Padmanand V, Partner and Agriculture Industry Leader, Grant Thornton Bharat Very apt focus on the agri sector. Focus is rightly on enhancing pdty, engendering agriculture tro women focus, competitive import substitution in pulses and oil seeds tro phased MSP support for 4 years and in urea tro establishing a 7 lakh MT urea processing plant in Assam. Thrust on FPOs as implementing platforms is emphasized on. Further, in the export context, the largest contributor I.e. fisheries will be promoted tro supporting dedicated zones. KCC targets and limits have also been enhanced to address credit issues. Padmanand V, Partner and Agriculture Industry Leader, Grant Thornton Bharat In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced several key measures to bolster the Micro, Small, and Medium Enterprises (MSME) sector: 1. Enhanced Credit Guarantee Scheme: The credit guarantee cover for micro and small enterprises will be significantly improved. The guarantee limit will increase from ₹5 crore to ₹10 crore, unlocking an additional ₹1.5 lakh crore in credit over the next five years. This initiative aims to facilitate easier access to credit for MSMEs, thereby supporting their growth and expansion. 2. Revised Investment and Turnover Limits: To encourage MSMEs to scale their operations, the investment and turnover thresholds for classification have been enhanced. The investment limit has been increased to 2.5 times, and the turnover limit has been doubled. This adjustment is expected to instill confidence among MSMEs, enabling them to grow and generate employment opportunities for the youth. 3. Technological Upgradation and Capital Access: The government will focus on facilitating technological upgrades and improving access to capital for MSMEs. These efforts are designed to help MSMEs achieve higher efficiencies and remain competitive in the market. These measures reflect the government's commitment to strengthening the MSME sector, recognizing its vital role in job creation and economic development. Padmanand V, Partner and Agriculture Industry Leader, Grant Thornton Bharat Global skilling partnerships will enable upgrading manufacturing. Infrastructure will be expanded in IITs set up after 2015, allowing for 6,500 more students across five IITs. Also, a Centre of Excellence for artificial intelligence in education is to be established with an outlay of ₹500 crore. Padmanand V, Partner and Agriculture Industry Leader, Grant Thornton Bharat MSMEs are to be supported particularly tro credit support and technology upgrading. Further trade policy is also being aptly oriented, namely through reducing or removing duties on imported capital goods such as shuttle's looms benefiting textile msme s and enhancing import tariffs on electronic goods including flat display kits to support electronic goods msmes tro a policy of phased protection. |
| 5 | Ashok Varma, Partner and Education & Skill Development Expert, Grant Thornton Bharat The PM Dhan Dhanya Krishi Scheme will assist farmers in 100 districts with lower productivity and insufficient post-harvest management infrastructure. This is a positive step towards addressing low productivity while also supporting income enhancement for farmers in these areas. It will also promote processing capacity, benefiting nano and micro-enterprises in rural regions. Ashok Varma, Partner and Education & Skill Development Expert, Grant Thornton Bharat Cancer incidence in India is rising, with cases expected to increase by 27.7% from 2015 to 2025. According to the National Cancer Registry Program Report 2020, one in nine people is likely to develop cancer in their lifetime. In response, the Union Budget’s plan to establish Cancer Day Care Centres in every district over the next three years is a timely initiative. It aims to improve access to cancer treatment and support, particularly in remote areas, bridging a critical gap in healthcare services. |
| 6 | Narendra Ganpule, Partner and Insurance Industry Leader 100% FDI in Insurance will attract infusion of fresh capital and improve competitivenss of the industry. This will also address un-insurance and under-insurance challenges faced by our country. |
| 7 | Tarun Baijnath, Partner, Grant Thornton Bharat In the 2025 Budget, the strategic focus on empowering rural communities, youth, and women marks a pivotal step toward an inclusive and resilient economy. The Economic Survey's call to address the glaring gap in vocational education underscores a critical opportunity for robust public-private partnerships, essential in cultivating a skilled workforce. With initiatives like the Rural Prosperity Program, this budget aspires to create sustainable employment avenues, reducing migration and fostering local growth. To bridge the widening divide between academia and industry, the establishment of five Centres of Excellence is not just a necessity, but a cornerstone for aligning education with the evolving demands of the job market. The Budget marks a transformative shift in skill development, with the modernization of 1,000 ITIs to ensure training content and design are in direct alignment with industry needs. Additionally, with the establishment of 50,000 Tinkering Labs across schools, the focus on entrepreneurship and innovation will empower the next generation to think creatively, innovate fearlessly, and drive India’s future growth. |
| 8 | Shridhar Kamath Partner and Engineering & Industrial Products Industry Leader "There is a great deal of credit support with credit cards from the government for Micro and Small enterprises. Funding and credit have been in focus to help MSME’s set up and grow. We need to wait for details in the annexure D to understand support for access to technology , Efficiency and productivity improvements to ensure competitiveness. With all the focus on sectors like food processing, agri, fisheries and aquaculture, clean tech manufacturing etc. plus infrastructure, a lot of the equipment that goes into these manufacturing units will allow a significant amount of benefit to small and medium enterprises. This manufacturing mission should be beneficial small, and medium enterprises with policy support Overall the budget seems to be positive for manufacturing." Shridhar Kamath, Partner and Engineering & Industrial Products Industry Leader, Grant Thornton Bharat There is a great deal of credit support with credit cards from the government for Micro and Small enterprises. Funding and credit have been in focus to help MSME’s set up and grow. We need to wait for details in the annexure D to understand support for access to technology , Efficiency and productivity improvements to ensure competitiveness. With all the focus on sectors like food processing, agri, fisheries and aquaculture, clean tech manufacturing etc. plus infrastructure, a lot of the equipment that goes into these manufacturing units will allow a significant amount of benefit to small and medium enterprises. This manufacturing mission should be beneficial small, and medium enterprises with policy support. Focus on Ease of Doing Business with respect to compliances and regulations should also be a positive for MSMEs. |
| 9 | Jaspreet Singh, Partner and GCC Industry Leader, Grant Thornton Bharat Budget focus in establishing a deep tech fund for the country presents a transformative opportunity to drive innovation and economic growth. As noted by industry experts, Investing in the development of a robust deep tech ecosystem transcends immediate financial considerations; it is an investment in the future—a commitment to fostering innovation that can solve some of the most pressing global challenges. Jaspreet Singh, Partner and GCC Industry Leader “The Budget’s focus on expanding talent availability and infrastructure in Tier-2 cities marks a significant step in strengthening India’s Global Capability Centre (GCC) ecosystem. By unlocking access to a wider talent pool, including professionals who prefer to stay in their hometowns, this initiative will enhance workforce stability and retention. Improved infrastructure will further enable seamless operations, making Tier-2 cities attractive destinations for high-value global work. As GCCs evolve into strategic hubs for innovation and technology, this expansion will drive inclusive growth, reduce regional disparities, and position India as a global leader in digital and business services. A well-distributed GCC network will ensure long-term resilience, scalability, and global competitiveness.” |
| 10 | Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat The Trade Platform for Trade Documentation signals a shift towards easing business operations and serves as a precursor to the application of deregulation principles in documentation requirements moving forward. In an era of regionalisation, as opposed to globalisation, this digital initiative is a significant step forward, promoting bilateral cooperation. Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat Regulatory harmonisation initiatives have typically been focused on the financial services sector. The government's decision to establish a High-Level Committee for regulatory reforms in the non-financial services ecosystem marks a significant shift towards deregulation. Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat The Union Budget 2025’s ₹10,000 crore Fund of Funds (FoF) reflects a bold strategy to transform India into a global innovation hub. This initiative not only boosts capital but focuses on emerging sectors like agritech, clean energy, and healthcare, aligning with global trends in sustainability and technology. By supporting the entire innovation value chain, it ensures startups are not just funded but positioned for global leadership. This move redefines India’s startup identity, making it a pioneer in tech-driven, sustainable solutions and a critical player in the future of global commerce. |
| 11 | Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat Investments in agriculture, rural industries, and manufacturing will significantly boost incomes and drive consumption growth across India. The PM Dhan Dhanya Krishi Yojana will uplift 100 low-productivity districts by improving irrigation, post-harvest storage, and market access, ensuring better farm yields and higher earnings for rural households. Edible oil and pulses initiatives under Aatmanirbharta, along with NCCF/NAFED procurement, will stabilize farmer incomes and reduce price volatility, further strengthening rural spending power. The Makhana Board in Bihar will expand production and marketing through FPOs, creating new income streams. Meanwhile, the INR 4 lakh crore leather and footwear mission, expected to generate 22 lakh jobs, will boost employment-led consumption. Additionally, India Post’s transformation into a public logistics giant will improve rural commerce and market connectivity. These initiatives will increase disposable incomes, strengthen supply chains, and accelerate rural consumption, reinforcing domestic demand and overall economic growth. Furthermore, investments in sustainable toy production can provide significant support to artisans in rural areas. By focusing on eco-friendly materials and traditional craftsmanship, this sector can empower rural communities, create jobs, and offer a sustainable income source while driving consumption growth. |
| 12 | Ashish Chhawchharia Partner and Aviation Industry Leader, Grant Thornton Bharat The government's emphasis on regional connectivity through the revamped UDAN scheme highlights its commitment to the growth of the aviation sector. With 120 new destinations added to the existing 619, the scheme is set to boost tourism and trade. |
| 13 | Saket Mehra Partner and Auto & EV Industry Leader Reduction in customs duty on lithium will significantly lower input costs for manufacturing lithium-ion batteries in India, providing a much-needed boost to the country’s emerging electric vehicle (EV) sector. Saket Mehra, Partner and Auto & EV Industry Leader, Grant Thornton Bharat The Budget’s customs duty cuts on lithium-ion batteries, alongside the National Critical Mineral Mission, mark a key step in strengthening India’s EV ecosystem. Lower import costs will make EVs more affordable, while investments in domestic mineral exploration, battery manufacturing, and electrolyte production will drive long-term self-reliance. These initiatives will reduce supply chain vulnerabilities and accelerate India’s shift to clean mobility. By fostering innovation, local manufacturing, and resource security, India is positioning itself as a global hub for sustainable transport, ensuring a competitive, resilient EV industry aligned with its Net Zero goals. |
| 14 | Manoj Mishra, Partner, Indirect Tax, Grant Thornton Bharat The Production Linked Incentive (PLI) Scheme has been a game-changer in India's manufacturing landscape, driving ₹1.46 lakh crore in investments and generating exports worth ₹4 lakh crore. Covering 14 strategic sectors, including electronics, pharmaceuticals, automotive, and renewable energy, the initiative has enhanced domestic production, reduced import reliance, and positioned India as a competitive global manufacturing hub. With over 9.5 lakh jobs created and substantial foreign investments attracted, the PLI Scheme is a testament to India's commitment to self-reliance and industrial growth under the Atmanirbhar Bharat vision. Expectation - Budget should focus on expanding the scheme to encompass green energy, advanced textiles, space tech and electronics components among others, as well as extend support to labour-intensive sectors for job creation |
| 15 | Bhavik Vohra, Partner, Grant Thornton Bharat India’s logistics sector is undergoing a transformation, driven by strong government support. The conversion of India Post into a public logistics giant, bolstered by 1.5 lakh rural post offices and a widespread network of daak sevaks, will enhance rural commerce and last-mile connectivity. With INR 1.5 lakh crore in interest-free loans to states, infrastructure development is set for significant growth. As the Economic Survey highlights, PPPs across ministries will speed up project delivery, while investments in shipping, railways, roads, and airports will streamline supply chains and cut lead times. Private sector participation, particularly from Private Equity Funds and large industrial players, will drive capital deployment, positioning India as a global logistics hub. Bhavik Vohra, Partner, Grant Thornton Bharat Transformation of India Post is a mega announcement which will drive rural employment and is a major boost to the rural economy, SME and MSME sector. This will also boost e-commerce and quick commerce sector with the availability of logistics hubs and delivery partners for their last mile delivery in rural and tier II and III cities and serve the underserved. |
| 16 | Amit Kumar, Partner and Climate Ecosystem Leader, Grant Thornton Bharat On critical minerals,""The Union Budget 2025-26 strengthens India’s clean energy future by fully exempting Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals. This move ensures a steady supply of essential raw materials for industries such as electric vehicles, energy storage, and electronics while reducing input costs and boosting domestic manufacturing. The exemption accelerates India’s transition to self-reliance in clean technology and sustainable energy. It also attracts investment, expands local production, and reduces dependency on imports. In addition to driving industrial growth, it creates high-value jobs for young people and reinforces India’s position as a global leader in renewable energy and battery storage."" |
| 17 | Ramendra Verma, Partner and Government Consulting Leader, Grant Thornton Bharat • Aviation Industry - The modified UDAN scheme, connecting 120 new destinations, will significantly boost regional connectivity, fostering economic growth by enhancing trade, tourism, and investment opportunities across underserved areas. • Tourism Industry - Developing the top 50 tourist destinations in partnership with states will not only promote cultural heritage but also stimulate local economies by attracting more tourists, creating jobs, and supporting small businesses through initiatives like MUDRA loans for homestays. • Energy Industry - Amending the Atomic Energy Act and launching the Nuclear Energy Mission will drive innovation and investment in the energy sector, contributing to energy security and sustainability while positioning India as a leader in advanced nuclear technologies. • Agriculture Sector - The PM Dhan Dhyan Krishi Yojana, targeting 100 districts with low yields, will enhance agricultural productivity and resilience, boosting rural economies through modern farming practices, technology adoption, and increased investment. • Telecom Industry - Providing broadband connectivity to all government-run secondary schools and primary healthcare centres in rural areas through BharatNet will bridge the digital divide, enhancing access to education and healthcare, and fostering economic development in rural regions. • Healthcare Industry - Setting up daycare cancer centres in all district hospitals and increasing medical college seats will improve healthcare accessibility and quality, addressing the shortage of healthcare professionals and boosting the healthcare sector's capacity to serve the population. • Bihar - The establishment of new greenfield airports, a Makhana Board, and a food processing institute in Bihar will enhance infrastructure, boost local economies, and create job opportunities, driving balanced regional development and uplifting the state's economic prospects. |
| 18 | Abhinav Akhilesh, Partner and Health & Human Services Leader, Grant Thornton Bharat Focus on boosting Rural Consumption through Agricultural Productivty Enhancement, Horticulture and Fisheries related investments, enhancing of credit schemes, etc are welcome and are expected to enhance economic growth in the long term. Social Security initiative for Gig workers as well as enhanced initiatives under PMSVNIDHI will address issues of urban poverty as well. Small but extremely significant announcements on Circular Economy in the shipbuilding sector as well as critical minerals are expected to demonstrate potential of a truly circular economy in India. The announcement in the Indian budget to set up cancer day care centers in every district hospital is a significant step towards strengthening the country's healthcare infrastructure. This initiative will not only enhance accessibility to quality cancer care but also alleviate the financial burden on patients, particularly those from rural and underserved areas. By providing comprehensive cancer care services, including diagnosis, treatment, and palliative care, these day care centers will play a crucial role in improving health outcomes and saving lives. |
| 19 | Niladri B, Partner and Metals & Mining Industry Leader, Grant Thornton Bharat The Union Budget 2025–26 strengthens India’s clean energy future by fully exempting Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals. This move ensures a steady supply of essential raw materials for industries such as electric vehicles, energy storage, and electronics, while reducing input costs and boosting domestic manufacturing. The exemption accelerates India’s transition to self-reliance in clean technology and sustainable energy. Niladri B, Partner and Metals & Mining Industry Leader, Grant Thornton Bharat The benefits of the existing tonnage tax scheme are proposed to be extended to inland vessels registered under the Indian Vessels Act, 2021, to promote inland water transport in the country. This will benefit the movement of bulk materials (e.g. coal) in the coming year. |