India's 2025 Budget: Navigating Growth and Fostering Innovation

Economic Outlook and Growth Projections

India's economy is projected to grow at a healthy 6.3% to 6.8% in fiscal year 2026. Professor Vishwanathan Iyer, Professor of Finance at Great Lakes Institute of Management, Chennai, emphasizes the 2025 budget's crucial role in maintaining this momentum. He highlights the importance of investments in manufacturing, infrastructure, and digital transformation for increased productivity and job creation. Further bolstering this growth will require strategic planning in areas such as supporting small and medium-sized enterprises, skill development, and AI-driven innovation.

Dr. Vikas Prakash, Director - PGPM & Professor at Great Lakes Institute of Management, Gurgaon, finds the projected growth commendable given global uncertainties, echoing sentiments from various business surveys. He credits the Chief Economic Advisor and points to deregulation as a key theme, emphasizing the need for improved "Ease of Doing Business" initiatives at the state level, including rationalizing stamp duty and reforming the Factory Act. He also calls for a reassessment of MSME incentives to encourage larger-scale growth and economies of scale.

Education: Investing in the Future

Dr. Jones, Principal and Head of the Institute of Management, Great Lakes Institute of Management, Gurgaon, reflects on the mixed bag of the previous budget, noting increased support for world-class institutions but decreased access for less privileged students due to cuts in scholarships and aid. He highlights the significant gap between India's education spending (4.5% of GDP) and that of developed nations (6-14%).

Looking forward, Dr. Jones anticipates the 2025-26 budget will prioritize digital learning, skills development, technical and professional education, and teacher upskilling. He also expects continued focus on internationalization initiatives and R&D, recognizing that a well-educated citizenry is vital for global success.

Arti Dawar, Deputy CEO of Shiv Nadar School, emphasizes the need for increased collaboration between government and industry for internships and skill-based training, along with investments in technology-driven solutions. She also advocates for improved financial support for meritorious students and a streamlined patent process for educational institutions.

Sector-Specific Insights: From Manufacturing to ESG

Across various sectors, experts shared their expectations for the upcoming budget. Abhishek Dua, CEO & Co-Founder of Showroom B2B, calls for an expansion of the Production-Linked Incentive (PLI) scheme to include high-demand sub-sectors like retail, aiming to attract investment and reduce import dependency. Kashika Malhotra, Head of Business Development at Brandman Retail, anticipates a reduction in GST and customs duties on certain goods to boost consumer demand and strengthen the retail ecosystem.

In the pharmaceutical industry, Dr. Saurabh Arora, Managing Director of Auriga Research, hopes for renewed focus on research and development, suggesting weighted tax deductions and potential technology upgradation support. Mr. Raja S., Founder and Managing Director of Hearzap, emphasizes the need for continued investment in healthcare infrastructure, particularly in rural areas, alongside promoting digital health adoption.

Vaibhav Khanna, CEO & Co-Founder of Ezstays, highlights the potential of student housing as a distinct asset class and anticipates incentives for investors in this segment. Mr. Rajesh Patel, Co-founder & CEO of Snowkap, calls for policies that encourage ESG integration in businesses, emphasizing the importance of climate risk management and green technologies. Deepanker Mahajan, CEO and Co-founder of CoverYou, stresses the need for comprehensive insurance solutions for healthcare professionals in the face of evolving digital threats.

Sourabh Deorah, CEO & Co-Founder of AdvantageClub.ai, highlights both the need for tax relief for salaried employees and the opportunity to position India as a global tech leader. He suggests expanding tax benefits to include wellness services and simplifying taxes for tech startups.

Core Sector Performance and Industrial Production

Aditi Nayar, Chief Economist at ICRA Limited, notes a slight easing in core sector growth to 4.0% in December 2024, largely in line with recent trends. She expects IIP growth to moderate to around 3-5%.