Budget 2025-26: What Indian Businesses Expect from the Finance Ministry This Year
Ahead of Union Budget 2025-26, Indian businesses are eyeing tax reforms, ease of doing business, and sector-specific incentives. Here’s a deep dive into key industry expectations.
NewsSutra
As India prepares for the Union Budget 2025-26, anticipation is mounting across industry corridors. With the general elections behind and a renewed political mandate in place, business leaders and entrepreneurs expect bold, growth-centric reforms from Finance Minister Nirmala Sitharaman.
The previous budgets have focused heavily on capital expenditure, financial inclusion, digital public infrastructure, and green growth. However, this year, businesses—from startups to conglomerates—are calling for simplified tax structures, policy stability, and targeted support for key sectors.
This article dives deep into the most critical expectations Indian businesses have from Budget 2025-26 and how the Finance Ministry might respond.
1. Tax Reforms and Rationalisation
Corporate Tax Simplification
India has one of the more competitive corporate tax regimes globally, with 25.17% tax for domestic companies not availing exemptions (CBDT Circular). However, businesses continue to grapple with compliance complexity.
Key Demands:
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Rationalisation of GST slabs to reduce classification disputes
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Simpler TDS/TCS rules, especially for digital and cross-border services
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Clarity on crypto taxation and virtual digital assets
📌 Explore the Income Tax Department Portal for official updates.
2. Boosting MSME Ecosystem
Micro, small, and medium enterprises (MSMEs) are the backbone of India’s economy, contributing nearly 30% to the GDP and employing over 110 million people (MSME Annual Report). But access to credit, compliance burdens, and delayed payments plague the sector.
What MSMEs Expect:
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Increase in CGTMSE credit guarantee limit
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Incentives for technology adoption and digitization
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One-stop grievance redressal portal with real-time resolution tracking
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Faster implementation of faceless compliance systems
📌 SIDBI is expected to play a pivotal role in channeling government-backed MSME credit schemes.
3. Startups and Innovation Economy
The Indian startup ecosystem has matured significantly, with over 115 unicorns and growing international interest. However, funding winters and regulatory uncertainties remain pressing concerns.
Startup Wishlist for Budget 2025-26:
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Removal of angel tax for domestic investors
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Increased capital gains exemption period for startup equity
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Easier ESOP taxation norms to retain and reward talent
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Expansion of Startup India Seed Fund and quicker disbursement cycles
📌 Stay updated via Startup India Hub for new scheme announcements.
4. Infrastructure and Capex Continuity
India’s economic recovery post-COVID has been driven largely by robust government capital expenditure. From highways to railways and ports, businesses want continuity and speed.
Industry Ask:
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Raise capital expenditure to over ₹12 lakh crore in FY26
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Increase public-private partnership (PPP) models in logistics and smart cities
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Enhance funding to PM GatiShakti and National Logistics Policy rollouts
📌 Refer to the GatiShakti Portal for project tracking and policy updates.
5. Sector-Specific Incentives
a) Manufacturing & PLI Schemes
India's push for Atmanirbhar Bharat and ‘Make in India’ needs a sharper manufacturing focus.
Suggestions:
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Expand Production Linked Incentive (PLI) schemes to sectors like toys, leather, and furniture
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Faster PLI disbursals and relaxation of performance thresholds
📌 DPIIT oversees most PLI initiatives.
b) Green Economy & Renewables
Businesses aligned with green energy want better incentives and policy clarity.
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Increased Viability Gap Funding (VGF) for green hydrogen projects
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Clarification on carbon credit trading policies
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Accelerated depreciation benefits for solar and wind energy equipment
📌 The MNRE is expected to announce new green finance measures in the budget.
c) Digital & Fintech Ecosystem
With the success of UPI and the India Stack, businesses seek more open APIs and regulatory sandboxes.
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GST input credit for SaaS exports
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Reduction in import duties on data center hardware
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Policy for deep tech investments via fund-of-funds
📌 For fintech policy developments, follow MeitY.
6. Labour Law Implementation & Ease of Doing Business
India’s long-awaited labour law codes are yet to see full nationwide implementation. Businesses are urging clarity and consistency across states.
Industry Demand:
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Phased rollout of Labour Codes with training modules
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Rationalisation of multiple state-level registrations
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Expansion of single-window clearance systems
📌 Labour Ministry Portal hosts draft rules and stakeholder feedback mechanisms.
7. Export and Trade Policy Push
Indian exporters want supportive measures to maintain competitiveness amid global slowdowns.
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Extension of RoDTEP and RoSCTL schemes
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Incentives for free trade agreement (FTA) aligned sectors
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Dedicated export infrastructure under TIES Scheme
📌 DGFT is expected to issue detailed circulars post-budget.
8. Capital Markets Reforms
The stock market boom has been driven by retail participation. Investors now seek more reforms for deeper market access.
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Reduced STT (Securities Transaction Tax)
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Tax parity for mutual funds and direct equity
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Introduction of bond index-linked investment products
📌 SEBI may collaborate with the Finance Ministry on retail investor policies.
Conclusion: A Growth-Oriented, Business-Friendly Budget?
With India set to retain its position as the fastest-growing major economy, Budget 2025-26 has the opportunity to unlock the next wave of business momentum. Stakeholders expect this to be not just a statement of accounts, but a strategic blueprint to fuel innovation, competitiveness, and inclusive development.
From tax rationalisation to sector-specific support and policy clarity, the wishlist is long—but the expectations are grounded. As India aims for a $5 trillion economy, the finance ministry’s choices in this budget will play a defining role.
