Union Budget 2025 presents a bold vision for Aatmanirbhar India

The government has crafted a strategic plan that not only seeks to revive the economy but also strengthen the manufacturing sector. (Bloomberg)
The government has crafted a strategic plan that not only seeks to revive the economy but also strengthen the manufacturing sector. (Bloomberg)

Summary

  • The 2025 Union budget presents a bold vision for India’s continued journey towards Viksit Bharat, aiming to make India Aatmanirbhar and a global leader in manufacturing, while simultaneously driving inclusive growth.

The Union Budget for 2025-26 will be known for several path breaking measures, and in a true sense, it's a people's budget. The budget has announced significant measures for manufacturing, MSMEs, employment, regulatory reforms, strategic areas like ship-building, nuclear and many more, thereby accelerating our journey towards Viksit Bharat.

These measures came at a pivotal moment when global economy is experiencing a slowdown, thereby presenting challenges for our exports. In such a scenario, it is important that our domestic economy is further stimulated and able to support growth so that India continues to be the fastest growing major economy. To address this, the government has crafted a strategic plan that not only seeks to revive the economy but also strengthens the manufacturing sector, which plays a crucial role in driving long-term growth.

Ficci, recognizing the need for renewed consumption and investment demand, had requested income tax rationalization that would stimulate both. The changes introduced in the personal income tax structure are noteworthy, as they will significantly increase disposable income in the hands of middle class and thus drive higher consumption demand, investments and employment.

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Central to the budget’s vision is the empowerment of micro, small, and medium enterprises (MSMEs), which form the backbone of India’s economy. The government's decision to revise the classification criteria for MSMEs, coupled with a significant doubling of credit limits with guarantee cover, is set to provide a substantial boost to this vital sector. These reforms will allow MSMEs to access higher financing, spur innovation and growth. Furthermore, specific measures targeting labour-intensive sectors such as footwear, leather, food processing, and toys—sectors that are dominated by MSMEs—will further stimulate employment, especially in tier-II and tier-III towns and cities.

A key aspect of the budget’s industrial focus is the government’s commitment to position India as a global manufacturing hub. The new National Manufacturing Mission announced was much needed as increasing the manufacturing share in our GDP requires a focused, mission-mode approach. In line with Ficci’s calls for greater export promotion, the budget includes several measures to enhance the country's export capabilities. One of the most notable initiatives is the launch of BharatTradeNet (BTN), a new digital public infrastructure that will unify trade documentation and financing solutions for Indian exporters. By leveraging India’s digital capabilities, BTN will streamline the export process, reducing the time and cost involved in doing business, and enhancing efficiency across the supply chain.

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The government has also recognized the importance of skills development in preparing India’s youth for the manufacturing jobs of the future. The budget’s proposals to expand capacity at premier technical institutions such as IITs, increase medical education seats, and establish 50,000 Atal Tinkering Labs in government schools are laudable. These initiatives will not only nurture creativity and innovation among young students, but also prepare them for careers in emerging technologies that are driving the future of manufacturing. Additionally, the establishment of Centres of Excellence for AI education will further equip the workforce with the skills needed for cutting-edge technologies.

In the realm of clean-tech manufacturing, the government has taken significant strides to ensure that India transitions to sustainable growth while strengthening its manufacturing capabilities. The focus on developing a domestic ecosystem for solar photovoltaic cells, electric vehicle batteries, motors, and electrolyzers aligns with the global push towards green energy and will reduce India’s dependence on imports, while simultaneously creating manufacturing jobs in the green sector.

Furthermore, the budget introduces reforms aimed at enhancing the competitiveness of Indian manufacturers in global markets. A review of customs duties, particularly in sectors like electronics, textiles, and critical minerals, will reduce costs for domestic manufacturers, ensuring a more level playing field. The exemption of customs duties on critical materials like cobalt powder and lithium-ion battery scraps will bolster local processing capabilities, further integrating India into global supply chains.

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Strategically, it is important to notice the announcements made for two sectors, namely, nuclear energy and ship building. The budget introduces a comprehensive vision for India's energy future, with a key focus on the Nuclear Energy Mission, aimed at developing at least 100 GW of nuclear energy by 2047. This initiative is essential for India’s energy transition, reducing dependence on fossil fuels while meeting growing energy demands sustainably. To facilitate private sector participation, the government will amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, creating a conducive environment for investment. With nuclear energy as a crucial part of the energy mix alongside renewables, India is on track to meet its ambitious sustainability targets while fostering economic growth. Large ships above a specified size will now be included in the Infrastructure Harmonized Master List (HML) and this will help in getting financing under infrastructure status.

In conclusion, the 2025 Union budget presents a bold vision for India’s continued journey towards Viksit Bharat, aiming to make India Aatmanirbhar and a global leader in manufacturing, while simultaneously driving inclusive growth.

Anant Goenka is senior VP, Ficci and vice chairman, RPG Group.

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