Finance Minister Nirmala Sitharaman presented the Union Budget 2025, marking her eighth consecutive Budget. This also happens to be the second Budget under the Narendra Modi 3.0 government. With a strong focus on improving the ease of doing business, the Budget has received praise from industry leaders and policymakers. It is designed to accelerate economic growth while ensuring financial inclusion for key sectors.
Arvind Kapil, MD & CEO of Poonawalla Fincorp, shared his insights on the Budget, calling it a well-balanced financial roadmap. According to him, it thoughtfully represents the nation’s current economic phase and highlights the two most critical segments—India’s middle class and the MSME sector. Both these groups form the backbone of the country’s economy and are essential for sustainable development.
Supporting Retail Lending and MSMEs
Kapil noted that the Budget brings a major boost to retail lending and MSME finance. By strengthening access to credit and financial support, the government is enabling businesses to scale up and enhance their operations. MSMEs play a crucial role in India’s industrial and service sectors, and improving their financial health will lead to sustained economic progress.
For the middle class, the Budget ensures increased disposable income, which is expected to result in higher consumption and investment. This is a crucial factor in economic expansion, as increased spending helps industries grow and create more job opportunities. By addressing financial challenges for both businesses and consumers, the Budget paves the way for a stronger financial ecosystem.
A Consumption-Oriented Budget
Kapil described the Budget as “rightly termed a consumption-driven budget.” He emphasized that private consumption will remain a core element in India’s economic growth. Encouraging people to spend more leads to increased demand for goods and services, which ultimately strengthens various industries.
To support this, the government has introduced meaningful tax relief, allowing individuals to have more financial flexibility. More income at hand means higher spending capacity, which can drive growth in retail, manufacturing, and service sectors. This cycle of increased earnings and spending is expected to fuel broader economic expansion.
Transforming the MSME Landscape
A key highlight of this year’s Budget is the revamped MSME framework. The government aims to empower over one crore MSMEs by providing financial support, technology adoption assistance, and business expansion opportunities. This move is expected to generate employment for a large number of people while enhancing the overall efficiency of the MSME sector.
With better financial aid and technological advancements, small businesses can scale their operations, compete effectively, and contribute more to the national economy. The focus on digitization and simplified access to credit will help businesses grow without unnecessary hurdles. This step strengthens India’s commitment to self-reliance and economic stability.
Encouraging Innovation and Self-Sufficiency
Kapil observed that the Budget promotes a self-sufficient economic model, with innovation and job creation playing key roles. By prioritizing growth and supporting entrepreneurs, the government is shaping an environment where businesses can thrive. Investments in infrastructure, technology, and financial support will provide long-term benefits to multiple sectors.
India’s economic landscape is evolving, and global uncertainties make it essential for the country to reduce its dependency on external factors. By empowering MSMEs and the middle class, the government is ensuring that India’s domestic economy remains strong and resilient. These measures are expected to bring stability and sustained economic progress.
A Well-Rounded Budget for the Future
The Union Budget 2025 has been welcomed by industry experts and policymakers for its balanced approach. It focuses on financial inclusion, ease of business, and economic expansion. By addressing the needs of both consumers and businesses, the Budget sets a solid foundation for growth.
The long-term impact of these initiatives will be visible in the coming months. With a clear emphasis on consumption, tax relief, and business-friendly policies, the Budget is expected to drive positive change across sectors. As businesses and individuals adapt, the full potential of these measures will unfold, shaping India’s economic future.
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