India’s Union Budget 2025: Expert Predictions on Digital Transformation, Infrastructure, and Startup Growth

India’s Union Budget 2025: Expert Predictions on Digital Transformation, Infrastructure, and Startup Growth
India’s Union Budget 2025 Predictions: Industry Experts on Digital Transformation, Infrastructure, and Startup Growth

As India prepares for the Union Budget 2025, businesses across the country are excited to see how it will impact their growth. From fintech and AI to logistics and manufacturing, experts are hoping for key changes to improve financial inclusion, build better infrastructure, and encourage digital growth. In this article, we’ve gathered insights from industry leaders on what they expect from the budget and how it could shape India’s future.

Driving Digital Transformation in FinTech

Rohith Reji, Co-Founder and CEO, Neokred

The upcoming Union Budget presents a critical juncture for India's fast-rising fintech and digital payments ecosystem. We anticipate measures that further incentivize digital transactions, potentially through tax breaks or subsidies for digital payment platforms and users.

Additionally, a focus on enhancing financial inclusion through digital means, including expanding access to credit and insurance products through digital channels, would be a welcome step. We also expect the government to address the evolving regulatory landscape for fintech especially the DPDP Act, fostering innovation while ensuring consumer protection and financial stability.

Trivesh D, COO, Tradejini

All eyes are now on the Union Budget on which the government will endeavor to make a somewhat fine balance between public expectation and economic priority. In this context, there is immense potential to focus on measures that could strengthen key sectors driving India’s growth trajectory.

For startups and MSMEs, which are critical to innovation and employment, the focus could be on enhanced financial support, streamlined tax structures, and policies promoting ease of doing business. Expanding access to credit and encouraging digital adoption might further empower these enterprises, strengthening economic resilience.

Increased capital expenditure on infrastructure, including urban development and logistics, could stimulate job creation and attract private-sector participation. Policies supporting kirana stores and small retailers could help build a strong logistics ecosystem for the quick commerce space. Additionally, strengthening the digital payment infrastructure, particularly in Tier II and III cities, would drive financial inclusion and broader adoption.

Streamlined trade processes and scaling up the Production Linked Incentive (PLI) Scheme could enhance global competitiveness and align with the 'Make in India' vision.

Job creation must remain a priority in employment, with skill development in emerging areas like AI, data analytics, and green technologies. Leveraging AI could address regional education gaps, enabling personalized learning and better teacher training. Public-private collaborations in vocational training could align the workforce with future industries.

Rohit Beri, CEO and CIO, ArthAlpha

As the fintech sector eagerly awaits the Union Budget, we anticipate forward-thinking policies that drive innovation, financial inclusion, and digital transformation. Key expectations include revised taxation structures for startups and fintech firms, promoting ease of doing business through tax parity between capital gains for listed and unlisted securities, which will spur investment in the startup ecosystem. Enhanced budgetary allocations for financial literacy programs and digital infrastructure in rural and semi-urban areas will further expand the reach of digital finance.

The introduction of a regulatory sandbox expansion for emerging technologies like blockchain and AI-driven lending platforms would foster innovation while ensuring consumer protection. Additionally, streamlined compliance norms for digital payments and incentives for expanding UPI penetration to international markets can position India as a global fintech leader. A holistic approach to data privacy regulations and credit access for MSMEs would further bolster growth. A dynamic, fintech-centric budget can strengthen India’s digital economy, making it more resilient and future-ready.

Manish Aggarwal, Founder & CEO, FINQY

As we approach the Union Budget, three key areas in personal finance deserve attention: easing MSME compliance, enhancing financial intermediary education, and rationalizing the tax burden.

MSMEs, the backbone of India’s economy, face overwhelming regulatory complexities. Simplifying compliance through streamlined tax structures and automated digital processes will empower these businesses to focus on growth and innovation, fostering economic resilience.

India’s growing middle class increasingly relies on financial products, yet many lack the knowledge to make informed decisions. Financial intermediaries, such as DSAs, work to bridge this gap. The Budget should introduce training programs and growth incentives to improve the quality of financial advice, enhancing consumer trust and transparency.

Finally, rationalizing the tax burden is critical for boosting household savings and investments. Raising income tax thresholds, increasing Section 80C deduction limits, and expanding incentives for financial instruments can provide much-needed relief. These measures will enhance disposable income, encourage long-term wealth creation, and stimulate consumption.

At FINQY, we believe these reforms will foster financial inclusion, empower individuals, and promote economic stability. We look forward to a Budget that simplifies personal finance and prioritizes the financial well-being of all Indians.


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Creating Jobs and Strengthening the Startup Ecosystem

Govind Sankaranarayanan, Co-Founder and COO, Ecofy

 A persistent theme across recent budgets has been the need for job creation. Incentives for labour-intensive sectors such as food, garments, and automotive components are required. New areas of employment generation such as the maintenance of electric vehicles and support for burgeoning rooftop solar ecosystems need budgets for vocational training of the youth.

As a green lender, we think that the larger banking system needs to be encouraged to channel funds to SMEs looking to become resource-efficient. The largest chunk of jobs gets created within the SME space and therefore the continuation of incentives to SMEs would be desirable through this year's budget incentives.

Manish Panwar, Business Head, Xumane 

The 2025 Indian Union Budget holds the potential to further strengthen the startup ecosystem by introducing more comprehensive tax incentives for ESOPs, which remain a key tool for attracting and retaining talent. As the government focuses on fostering innovation, proposals for deferred taxation, reduced capital gains tax, and simplification of cap table reporting are expected to provide startups and SMEs with much-needed financial support.

While the current regulatory environment has made strides, the Budget 2025 could offer a transformative shift, creating a more attractive space for both entrepreneurs and employees in the ESOP ecosystem.

Advancing Technology and Empowering MSMEs for Growth

Ajay Goenka, Co-Founder and CFO, Polestar Solutions 

The 2025 Union Budget holds the promise of advancing India’s position as a global IT powerhouse by prioritizing R&D funding, boosting AI adoption, and strengthening technological innovation. With a focus on enhancing public and private investment in research and development, India can catalyze the next wave of homegrown breakthroughs.

Expanding incentives for AI-driven solutions and automation will not only elevate India’s tech capabilities but also drive global competitiveness, ensuring that Indian IT firms remain at the forefront of the digital economy. Strategic funding and policy reforms in this space will empower Indian companies to innovate faster, scale globally, and contribute to shaping the future of technology.

Prem Thudia, Founder and CEO, SMBXL Pvt Ltd  

As we reflect on the much-awaited Union Budget 2025, digitization is crucial for enhancing efficiency within the MSME sector. However, equally vital is the skill development of the workforce supporting this ecosystem. An inclusive system will empower MSMEs to act as a unified force, enabling India to compete effectively on the global stage and achieve its economic aspirations. 

We expect the Union Budget to prioritize and incentivize skill development initiatives, significantly reduce compliance burdens, and establish streamlined systems for single-window clearances. Fostering an inclusive society is paramount, and therefore, we anticipate a strong focus on developing fully functional infrastructure to support growth at the rural level.

Girish Rowjee, Co-founder & CEO, greytHR

As Union Budget 2025 approaches, we anticipate focused measures that address the critical needs of SMEs, employees, and the workforce at large.

Micro, Small, and Medium Enterprises (MSMEs), which contribute nearly 30% to India’s GDP, are the backbone of job creation and economic growth. Simplified compliance processes and easier access to financing are essential for their success. The eagerly awaited implementation of the Code on Wages could transform labor regulations by unifying and simplifying wage laws. This reform promises greater transparency, improved labor conditions, and fairer compensation, reducing burdens for both businesses and workers. Combined with rationalized taxation and incentives for workforce expansion, such measures can create a thriving, competitive ecosystem.

Easing financial pressures on employees is just as important. As the heart of India’s workforce, employees are seeking relief through income tax reforms. By enhancing disposable incomes, the government can provide much-needed financial respite, boost consumer confidence, and fuel domestic demand, driving broader economic progress.


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Strengthening AI Innovation and Data Security in India

Sauvik Banerjjee, MD & CEO, sirrus.ai

Emphasis on data security and emerging technologies is crucial for India's technology evolution. As we look forward to Union Budget 2025-26, I believe Artificial Intelligence (AI) will find special mention this time, building on the INR 10,000 crore allocated for the India AI Mission in March 2024. The government could further strengthen the tech ecosystem in the country by offering tax incentives for AI-based startups. Additionally, allocating resources for the establishment of AI research centres, besides launching upskilling programmes, could help us bridge the talent gap in the sector, positioning India as a global leader in AI technology.

Neehar Pathare, MD, CEO, and CIO, 63SATS 

As India strides forward in its digital journey, the Union Budget 2025 must position cybersecurity as a cornerstone of our growing digital economy. With cyber threats escalating, enhanced government support, innovation-driven policies, and significant investments in cybersecurity infrastructure are paramount.

Beyond BFSI and Critical Infrastructure sectors, stringent cybersecurity frameworks must extend to other industries, ensuring robust protection of our nation’s digital assets. SMEs, particularly vulnerable to cyberattacks, need targeted assistance to adopt affordable and effective cybersecurity solutions, safeguarding their growth and fuelling the broader economy.

A cybersecurity rating system, akin to credit ratings, could set benchmarks, driving organizations to enhance security, build transparency, and foster trust in the digital ecosystem.

From a citizen’s perspective, a mass cyber education drive—integrating web programs, evolving offline IT certifications, and introducing cybersecurity in school curriculums—will not only address the workforce shortage but also reduce cyber theft and financial losses. At 63SATS, we are committed to empowering India’s vision of a Viksit and Surakshit Bharat.


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Revolutionising Logistics for Global Competitiveness

Ravi Goel, CBO, RapidShyp

As we approach the upcoming Union Budget, the logistics sector anticipates reforms and investments that will accelerate its modernization and strengthen India’s position in the logistics sector worldwide. Key expectations include enhanced allocations for infrastructure development, with a focus on last-mile connectivity and multi-modal logistics parks (MMLPs) as part of the PM Gati Shakti plan, which aims to develop over 35 MMLPs with investments exceeding INR 50,000 crore.

Modern warehousing infrastructure needs targeted incentives, as the market is projected to grow to INR 2.8 lakh crore by 2025. We also look forward to simplified regulatory frameworks and increased incentives for technology adoption, including AI-driven logistics solutions and automated systems, which could reduce logistics costs from 14% of GDP to a globally competitive 8-10%. Supporting EV infrastructure for green logistics will align with the government’s target to achieve 30% EV penetration by 2030. Favorable GST reforms and streamlined compliance will enhance competitiveness for India’s 63 million MSMEs, making this sector more efficient and future-ready.

Driving Growth and Innovation in India's Manufacturing Sector

Manojkumar Sharma, Founder of Ashnam Home

To bolster India's home decor manufacturing sector, it is essential to expand and simplify Production Linked Incentive (PLI) schemes, reduce GST rates on home decor items, and introduce special credit schemes for startups. These measures will not only encourage domestic production, enhance competitiveness, and support small and medium-sized businesses, but also pave the way for a potential surge in consumer demand. Additionally, implementing subsidies for advanced manufacturing technologies and increasing export incentives will facilitate technology adoption and encourage startups to explore global markets.

Infrastructure development is crucial, as it focuses on improved logistics and reliable utilities to reduce operational inefficiencies. Promoting made-in-India through incentives for eco-friendly and other manufacturing practices and launching skill development initiatives for artisans will address both the skill gap and global demand for sustainable products. Finally, supporting e-commerce growth by reducing compliance costs and simplifying regulatory requirements cannot only help startups thrive but also foster a culture of innovation in this dynamic sector.

Dinesh Chandra Pandey, Founder of Shankar Fenestrations and Glasses

The manufacturing industry is optimistic about the upcoming budget, expecting measures to simplify processes and drive growth. In 2024, this sector contributed 17.3% to the GDP of India, with predictions to grow at 3.46% between 2025 and 2029. Incentives for advanced technologies and sustainability are vital, as India strengthens AI research and green manufacturing. With GDP growth forecasted to be at 6.5% for FY25, further improvements to strengthen logistics and supply chain infrastructure are essential. Policies promoting energy efficiency and local battery production will drive long-term sustainability. The right initiatives can expand and innovate the sector, solidifying India’s role in global industrial and economic progress.


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