Industry lauds Union Budget 2025, tax relief for middle class, consumption stimulus

A key highlight was the increase in the income tax exemption limit to ₹12 lakh, effectively eliminating income tax for people earning up to this amount. This move is expected to boost household savings and consumption, thereby stimulating domestic demand.

The budget also introduced a revised tax structure with reduced rates across various income slabs. In addition to tax reforms, the budget allocated funds to enhance agricultural productivity, including a six-year program to boost the production of pulses and cotton.

This initiative seeks to reduce reliance on imports and support farmers' incomes.

Furthermore, the budget emphasized the formalization of the gig economy, aiming to improve access to healthcare and welfare benefits for gig workers. Investments were also directed towards startups, innovation, tourism, infrastructure development, and the energy sector, with a notable Nuclear Energy Mission to achieve 100 GW of nuclear power by 2047.

Overall, the Union Budget 2025-26 reflects the government's commitment to add momentum to the sluggish economic growth, encourage middle class spending, and addressing key sectors such as agriculture and the gig economy.

Budget 2025 Reactions

CS Setty, Chairman, SBI

The Union Budget reaffirms India as an innovation and knowledge centric economy with a slew of reforms across agriculture, MSME, export centricity, education and healthcare and balancing skills and AI.

The rationalisation of personal tax reforms could unleash a potential consumption boom of at least Rs 3.3 trillion spend over baseline. The fiscal numbers are conservative.

The budget has several bold initiatives for Agri sector aimed at boosting farmers income through crop diversification, participation in Agri value chains and focus on allied activities.

The MSME sector will benefit from expanded credit availability through credit guarantees, empowering women entrepreneurs and credit cards for micro enterprises.

The enhancement of TCS limit on remittances, the enhancement of TDS limits for senior citizens will significantly simplify ease of doing business. Overall, the Budget is a significant step towards making India a global hub for innovation and advanced manufacturing.

Shailesh Chandra, President, SIAM

As the Auto Industry transits into cleaner powertrains, in line with the PM Modi's vision on sustainable mobility, it will specifically benefit from the National Manufacturing Mission, which supports clean tech manufacturing for batteries, motors and controllers. 

Furthermore, exempting critical minerals (e.g. Cobalt, Lead, Zinc etc.), scraps of Lithium-ion battery, and 35 additional capital goods from customs duty, will help create a strong EV ecosystem in the country.

 The Export Promotion Mission and support for integration with global supply chains are critical initiatives that will enable Indian manufacturers to expand export footprints, and align with global supply chains.

The Auto Industry is also thankful to the Government for creating a high-level committee for regulatory reforms, aimed at reviewing regulations, certifications, licenses, and permissions, as this will certainly help in ease of doing business in our sector.”

The government's strategic focus on capital expenditure, while prudently managing non-capex expenditure, demonstrates excellent fiscal management.

Dhiraj Relli, MD and CEO, HDFC Securities

In a landmark fiscal measure designed to uplift the nation's backbone - its middle class - the government has graciously extended the tax-free threshold to a remarkable ₹12.75 lakh under the new tax regime.

This magnanimous gesture translates into an unprecedented infusion of ₹1 lakh crore into the hands of middle-class households nationwide.

Such a substantial enhancement to disposable income promises to invigorate the marketplace, mainly benefitting the fast-moving consumer goods sector and durable goods manufacturers, as families find themselves empowered to fulfill their essential needs and aspirational purchases with renewed confidence.

Navneet Munot, MD & CEO, HDFC Asset Management Co. Ltd.

Government has been doing heavy lifting on public capex. Now, spurring consumption by putting more money in the hands of taxpayers is a step in the right direction.

Government’s intention of investing in economy, people and innovation was the need of the hour to harness India’s demographic edge.

Set-up of Fund of Fund aimed at start-ups, along with a focus on MSMEs fosters entrepreneurship and could transform India from a nation of job-seekers to job-creators.

Simplification of tax structure and ease of compliance should aid in investor confidence and stimulate both, domestic and foreign investments.

While short-term volatility could be par for the course due to the current global economic backdrop, the long-term direction rooted in policy prudence and support for growth should bolster Destination India’s credentials for foreign and domestic investors alike.

Dr. Gyanendra Shukla, MD and CEO of Rallis India Ltd

The PM Dhan Dhanya Krishi Yojana will transform 100 agri districts by enhancing productivity, irrigation, storage, and credit access for 1.7 crore farmers.

The National Mission on High-Yielding Seeds, targeting 100+ climate-resilient varieties, will boost yields and incomes. A renewed push for Atmanirbharta in edible oilseeds and the Mission for Cotton Productivity will further support farmers and reduce import dependence.

By advancing rural prosperity, crop diversification, and scientific innovation, this budget reinforces the government’s commitment to self-sufficient agriculture.

At Rallis India, we remain dedicated to empowering farmers with sustainable crop protection and sustainable farming solutions, aligning with the government’s vision for a more resilient and prosperous agricultural sector.

Srikanth Kandikonda, Chief Financial Officer, ManipalCigna Health Insurance

We welcome the government’s decision to increase the FDI limit in the insurance sector from 74% to 100%. This progressive move will drive greater capital inflows into the sector, also improve insurance penetration.

The Union Budget provides major relief for the middle class, eliminating income tax on earnings up to ₹12 lakh under the new tax regime. This boosts disposable income, enabling greater investment in financial security tools like health insurance. ManipalCigna Health Insurance remains committed to expanding healthcare access, particularly for India’s missing middle.

Additionally, the government’s plan to establish 200 daycare cancer centres in district hospitals by 2025-26 is a commendable step toward strengthening healthcare accessibility. These centers will bridge critical care gaps, ensuring timely and affordable treatment for cancer patients across India. We look forward to supporting initiatives that enhance healthcare access and financial protection for all.

Harshavardhan Neotia, Chairman Ambuja Neotia Group

The budget proposals of Finance Minister Nirmala Sitharaman has provided the vision of a new India story, with a governance that is light touch and trusting, a regulatory regime that is encouraging for industry and policies that are focused on job creation.

The incentives for hotels, travel and tourism are really encouraging as it helps building hotels in key 50 destinations and allows benefits on funding from the infrastructure HML. The built-in collaboration with state governments in the design of the policy will help speed up these developments. There are many other boosters for the tourism eco-system in the budget proposals, including easing regulations on e-visa or providing more impetus to the Udaan Scheme, incentives to spiritual tourism and medical tourism.

Overall I see a growth and consumption oriented budget with more money left in the hands of the consumers through tax cuts which will help consumer oriented sectors.

Post Budget Quote from Saahil Goel – MD & CEO, Shiprocket

The transformation of India Post’s 1.5 lakh rural post offices, backed by a 2.4 lakh-strong workforce, marks a historic shift in Bharat’s logistics and economic landscape.

This initiative will bridge the urban-rural divide, ensuring seamless access to financial, digital, and logistical services in tier 2 and 3 cities. With public-private partnerships and digitization at its core, eCommerce will extend beyond urban centers, empowering local businesses, artisans, and entrepreneurs.

The government’s MSME-focused budget measures further reinforce this vision. Enhancing credit guarantees, raising MSME classification thresholds, and extending tax exemptions provide crucial financial support to small enterprises.

The introduction of customized credit cards with a ₹5 lakh limit for micro-enterprises and an expanded fund of funds program with ₹91,000 crores committed to AIFs signal strong intent toward fostering entrepreneurship and job creation.

These strategic interventions will not only strengthen Bharat’s economic backbone but also drive inclusive growth, ensuring that self-help groups, women entrepreneurs, and emerging start-ups can thrive. By integrating logistics expansion with robust financial support for MSMEs, the government is laying the foundation for a more self-reliant and prosperous Bharat.

Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance 

The Union Budget has clearly focussed 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 Lohia, Managing Director of Jupiter Wagons Ltd

India's infrastructure environment is being redefined by Public-Private Partnerships (PPPs), which give crucial projects efficiency, speed, and innovation.

PPPs are speeding up execution, releasing investment, and increasing industrial capacity in the areas of manufacturing, logistics, and mobility by fusing the vision of the public sector with the experience of the private sector.

This partnership aims to construct a robust, future-ready economy, not only roads, railroads, and ports.

With a greater emphasis on digital integration, sustainability, and smooth mobility, PPPs will create high-value jobs and stimulate economic growth.

India's competitiveness on the international scene will be further enhanced by the focus on long-term funding and structural changes.

India is poised to set new standards for infrastructure quality by creating an environment where the public and private sectors collaborate.

A solid PPP structure will ensure that progress is not only world-class but also inclusive, sustainable, and aligned with India’s long-term development goals.

Prashant Kumar, MD & CEO, YES Bank

The Union Budget remains growth oriented – not only attempting to correct for the cyclical growth concerns but also setting up the platform for a sustained long-term journey for the economy, keeping the focus strongly on the objectives of Viksit Bharat.

Importantly, sectors that are relatively more labour intensive in nature have received a boost within the budget – namely agriculture, MSME, footwear and leather, toys, food processing.

The focus of the budget has been on ways to improve productivity across various sectors and to provide adequate scope for the MSMEs to expand by enhancing the credit guarantee scheme for them. Importantly, the classification criteria for the MSMEs have also been significantly enhanced.

The Budget can also be lauded for taking up the challenge of enhancing the ease of doing business along with establishing a more stable taxation regime, that is likely to enhance business decision making, boost private sector investment and hence foster long-term growth.

On the other hand, reduction in the income taxes across the tax paying population should enhance consumption power of the middle class and boost deposit mobilization of the banking sector.

Amid all these positive reforms momentum, the FM has enabled an increase in the capital expenditures yet continuing with fiscal consolidation.

Dr. Anish Shah, Group CEO & MD, Mahindra Group

We commend the 2025 Union Budget for its continued support of robust consumption growth through changes in the tax structure, effectively placing more disposable income in the hands of the Indian consumer. This will encourage private sector capex to move in a positive direction.

The theme of "Make in India for the world" remains a key focus in this budget, with efforts to reduce India's manufacturing costs poised to significantly enhance the country's global competitiveness. In addition to providing an immediate stimulus for demand and growth, the budget emphasizes long-term growth through substantial infrastructure investments and a strong focus on innovation.

Lastly, the theme of inclusive development, with a strong emphasis on MSMEs, agriculture, and skilling, aims to create a resilient ecosystem that will drive economic growth and help achieve the Viksit Bharat Goals by 2047.

Venky Iyer - MD & CEO at Tata AIA Life Insurance

The Finance Minister delivered a growth-oriented budget while staying firmly on the path of fiscal consolidation pegging the fiscal deficit for FY 26 at 4.4%. A massive ₹1 lakh crore in personal tax relief directed at the middle class, will boost consumption, and enable households to invest in their financial security.

Initiatives around channelizing credit to the MSME sector with focus on labour intensive manufacturing, facilitating investments, smoothening the processes in the exports arena, reforms around the ease of doing business with an overall emphasis on minimizing onerous regulations augur well for the economy and its participants.

At Tata AIA, we stay committed to partnering with Individuals and Enterprises in their growth journey through our life insurance solutions.

Akshay Tiwari, Research Analyst - BFSI, Asit C Mehta Investment Interrmediates Ltd.

The budget aims to make a fine attempt to boost rural and agri income, and boost consumption of all strata of society.

Also, making sure that MSMEs continue to remain an important wheel of the economy by increasing investment in the sector and increasing credit guarantee.

Agri sector which was under stress, has been given certain reliefs by increasing the KCC loan limit from Rs 3 lakhs to Rs 5 lakhs and credit support for 17mn farmers.

Although no announcement has been made in the speech with regard to the affordable housing segment, the speech indicated that the sector continues to remain a key focus area for the central government.

Perhaps, the biggest announcement in the financial sector would be the much-anticipated increase in the FDI limit of insurance companies from the existing 74% to 100%. This will help the sector in terms of regulation and better execution of policies.

Mrunmayee Jogalekar, Auto and FMGC Research Analyst - Asit C Mehta Investment Interrmediates Ltd. 

The focus on improving the spending power of the middle class in the form of changes in tax slabs is a much-needed boost for the consumption space. No tax burden till an annual salary of Rs 12 lakh (vs Rs 7 lakh earlier) is a relief. Even at the higher end, the maximum tax rate of 30% will be applicable for incomes exceeding Rs 24 lakhs vs Rs 15 lakhs earlier.

This will be a boost for FMCG and automotive players, which are seeing the impact of an urban demand slowdown. 

Additionally, for FMCG players, focus on enhancing farm productivity and improving domestic value addition in food processing augur well in the medium term.

Anil Agarwal, Chairman, Vedanta Ltd

The Budget has hit the perfect note, providing great relief to the middle-class by making incomes up to Rs 12 lakh per annum completely tax-free. This is the biggest section of the middle-class. It has also significantly reduced the tax burden for incomes up to Rs 24 lakh.

We have made a decisive move to a world-class tax system which will be simple, transparent and friendly to taxpayers.

The spirit of tax reform is going to be seen in other parts of the economy with trust and self-certification at the core. This will provide a very big boost to manufacturing and mining.

I am delighted that mining is one of the 6 domains identified for transformational reforms over the next 5 years.

Along with mining, agriculture is also a priority, particularly with the goal of achieving self-sufficiency in areas like edible oils.

Mining, agriculture, manufacturing (including electronics, which is a thrust area for the government) can all help increase domestic production, reduce imports and create millions of good jobs in India.

I congratulate the PM and FM for a visionary Budget that has stimulated the perfect jugalbandi of robust consumption growth and accelerated investment - the keys to a #ViksitBharat.

For the auto sector, a focus on building a domestic ecosystem for EV batteries and a reduction in basic customs duty for critical minerals will help in improving the supply chain and long-term profitability of the sector.

Warren Harris, CEO & MD, Tata Technologies

The budget's focus on establishing a National Manufacturing Mission aligns with our goal of engineering in India for 'Make in India' and enhancing the nation's self-reliance in manufacturing. This initiative is poised to attract investments and improve efficiency, positioning Indian companies as globally competitive players.

The establishment of five National Centres of Excellence for Skilling is a pivotal move in building a future-ready workforce.

This initiative resonates with our commitment to engineering a better future for India's youth through investment in in-demand training programs across Industry 4.0, IoT, and advanced manufacturing, and collaborating with state governments to upgrade ITIs into technology hubs.

Additionally, the allocation of ₹500 crore for a Centre of Excellence in Artificial Intelligence for education underscores the importance of fostering innovation and research in AI, which will benefit both the education sector and the broader technology landscape.

Bharat Puri, MD, Pidilite Industries Ltd.

This budget stimulates consumption by enhancing consumer purchasing power, providing a significant impetus to the consumer sector.

The sustained emphasis on infrastructure development, coupled with a three-year project pipeline under the PPP model and state-backed incentives for capital expenditure, lays the groundwork for sustained long-term economic expansion.

Overall, this is a prudent and growth-oriented budget.

Jyoti Malhotra, MD, Volvo Car India

The emphasis on domestic value addition for EV batteries and the development of a comprehensive EV ecosystem, including battery recycling, customs duty exemption on 35 capital goods for EV battery manufacturing and charging infrastructure, are encouraging initiatives that should drive EV adoption across various segments.

By focusing on demand-side incentives, without placing an undue burden on taxpayers, the budget seeks to create a favorable environment for EV growth. Overall, the budget seems to be forward-looking and focused on sustainable economic development.

Avama Jewellers by Abhishek Kajaria

The Union Budget 2025-26 presents a promising outlook for the gem and jewellery industry, with measures aimed at boosting disposable income and strengthening the manufacturing and export sectors.

Policies that enhance ease of doing business and support industry growth will further solidify India’s position as a global jewellery hub.

Continued focus on innovation, skill development, and sustainability will be key drivers for long-term progress, ensuring the industry remains competitive in both domestic and international markets.

Indian Gem and Jewellery Creation

We were expecting reduction in the import of gold duty & polished diamond but there has been no change in the gem & jewellery sector. “No news is also a good news sometimes and stability allows businesses to operate without disruptions."

Crisanto Jewels

The Union Budget 2025-26’s continuation of the 6% import duty is expected to maintain the status quo in the jewelry sector. Although focus on increasing disposable income through tax reforms is a positive step for the jewellery industry.

With greater purchasing power, consumers may be more inclined to invest in fine jewellery, both as a luxury and an asset.

Additionally, any initiatives supporting manufacturing and exports will contribute to the industry's growth, ensuring a stronger market presence both domestically and internationally.