With its emphasis on growth and development through increased consumption, tax rationalisation, compliance reforms, and the promotion of the ‘Make in India’ campaign, the Union Budget 2025–2026 may be characterised as progressive and well-balanced. By establishing eight National Missions in various industries, including manufacturing, services, and agriculture, it serves all of these sectors and promotes innovation and research,” stated Dr. Vijay Kalantri, Chairman of WTC Mumbai.
The increased loan availability for startups and MSMEs, as well as assistance for technical and technological advancements, are among the budget’s main features. Raising the investment and turnover thresholds for MSME categorisation will expand the reach of MSME programs, enhancing loan availability and bolstering domestic manufacturing by include a greater variety of companies in the micro and small company categories. The credit guarantee cover for term loans has been raised to INR 20 crores in order to further assist exporting MSMEs. Furthermore, a personalised credit card with a 5 lakh Indian rupee limit has been made available to microbusinesses that have registered on the Udyam Portal. With a regulated guarantee cost for 27 priority industries, significant improvements have also been made to credit coverage for startups, encouraging entrepreneurship and innovation.
“Rural industrialisation is heavily prioritised in the budget, especially through the growth of logistics through India Post. It is anticipated that this program would spur industrial growth in rural regions, assisting in the migration of workers from agriculture into industries like manufacturing and services that are more productive. By investing in infrastructure, R&D, and export marketing, unique national missions like “Aatmanirbharta in Pulses,” high-yielding seeds, and cotton are also being introduced with the goal of increasing agricultural production, according to Dr. Kalantri.
Additionally, a number of measures have been put in place to encourage the creation of jobs and skill development. Labour-intensive manufacturing industries including leather, toys, footwear, and food processing have received a lot of attention.
Through five main focal areas—easiness of doing business, workforce development, MSME expansion, technological innovation, and quality production—the National Mission for Manufacturing was announced with the goal of promoting growth.
“A National Mission for Exports has been introduced to strengthen India’s export ecosystem,” Dr. Kalantri continued. Improving export finance, helping MSMEs get over non-tariff obstacles, and streamlining tariff structures are the main goals of the mission. In a number of industries, including electronics, IT, marine products, textiles, leather, and minerals, the budget also rationalises import taxes and levies. It is anticipated that these actions will greatly lower operating expenses for domestic producers, increasing their competitiveness internationally.
The increase of the Foreign Direct Investment (FDI) cap in the insurance industry to 100%, particularly for businesses that reinvest all of their premium income, is another significant budgetary change. This action is anticipated.
to boost domestic economic development and draw substantial investments to the insurance industry. The budget also lays out specific investment plans to promote expansion, such as the creation of funds devoted to deep technology, artificial intelligence (AI), innovation, and electronics.
Additionally, there is also a renewed emphasis on infrastructure development, especially through Public-Private Partnerships (PPP). The budget promotes comparable measures by state governments, guaranteeing broad economic development and infrastructure expansion,” Dr. Kalantri stated.
“The budget appears to have met industry expectations,” Dr. Kalantri said in reference to the numerous changes and initiatives aimed at promoting manufacturing and MSMEs. To a significant extent, the long standing need to rationalise taxation and lower compliance costs has been met.
Nonetheless, the implementation of these policy changes is equally important, and it is imperative that these efforts be carried out unconditionally and in accordance with their declared intentions.
He went on to say that one of the budget’s key components is the tax breaks for the middle class, which are anticipated to increase spending and spur economic development in the near to medium term. Additionally, Dr. Kalantri voiced hope for additional revisions in the new income tax law that will be unveiled the following week.