Industry pins high hope on Budget 2025, expects measures to push growth

New Delhi: Industry captains have pinned high hopes on the upcoming Union Budget and expect it will announce fresh measures to fire up key engines of economic growth.

Among the key expectations are lowering the tax burden for individuals, fresh incentives to further support emerging sectors like Electric vehicles (EVs), incentives for private sector investment and higher capital expenditure (capex) target for the next financial year 2025-26.

Union Finance Minister Nirmala Sitharaman will present the Budget on February 1, 2025.

“We anticipate Budget 2025 to introduce measures that strengthen the real estate sector. Revising tax slabs for middle-income earners and tackling raw material price volatility can help stabilise construction costs and housing prices, making homeownership more attainable. Redefining affordability based on regional needs and encouraging green building practices will make housing policies more inclusive and sustainable," said Venkatesh Gopalakrishnan, MD & CEO, Shapoorji Pallonji Real Estate.

Ketan Kulkarni, Managing Director, Gati Express and Supply Chain Limited said that the logistics industry anticipates bold initiatives aimed at improving last-mile connectivity and transformative reforms to strengthen the logistics and transportation ecosystem.

"A key expectation is the incentivisation of EV charging infrastructure, which is critical to driving sustainability through greater adoption of electric vehicles in logistics operations," he said.

Highlighting the issues being faced by the car rental sector, Ashok Vashist, Founder and CEO, WTiCabs urged the government to introduce a unified tax regime of 5% without input tax credit (ITC) across all car rental and leasing products.

"There are multiple tax regimes for the car rental business, namely 5%, 12%, 18%, and 28% plus cess for leasing. GST, being a destination-based taxation system, does not allow clients/end consumers to avail of Input Tax Credit (ITC) for such taxes. Moreover, this type of taxation makes car rentals more expensive for app-based aggregators, and leasing becomes costlier than bank funding due to GST being charged even on interest. This creates widespread confusion and results in a complicated taxation system, leading to complex accounting issues and increased litigation," he said.

Pradeep Bakshi, MD & CEO, Voltas Ltd said that while government's “Make in India” initiative has already made significant strides in reducing import dependency and generation of employment, there is scope for further support in form of subsidies and grants, particularly for MSMEs and smaller manufacturers, to foster local innovation and mass production.

"This would reduce the increasing costs of imports and local production while inducing global competitiveness for OEMs (original equipment manufacturers) and large component manufacturers. Further, the industry’s growth trajectory can be sustained by policies that encourage investment in new skill development workshops that enable seamless integration of digital and physical operations crucial in reaching the tech-savvy, Gen Z consumers and investor base," he said.

Pankaj Sharma, Managing Director at K2 Infragen said that simplified tax structures with lower rates for infrastructure projects, including green energy, and favorable regimes for carbon credits and offshore wind projects, can provide the sector with a significant boost.

"This budget offers a critical opportunity to strengthen India’s infrastructure story. By focusing on strategic investments and practical reforms, we can drive economic recovery and lay the groundwork for sustainable and inclusive growth in the years ahead," he said.

Ashish Suman, Partner, JSA Advocates & Solicitors called for increased allocation for roads and highways sector, revival of public private partnership (PPP) in infrastructure sector and enhanced financing for urban local bodies among other proposals.

"While the private sector has to be a keen participant, the government too needs to continue providing investment towards this sector, with specific focus on tier 2 cities where private capital may be scarce. In this regard, it is expected that the Budget may provide for dedicated financial outlay for projects in this sector with focus on urban housing, water and sanitation," he said.