CII BLOG

FM focuses on critical growth levers in 2025 budget to drive inclusive development

The Finance Minister, while presenting her eighth consecutive Budget on February 1, 2025, unveiled a range of growth-enhancing measures that will go a long way in realizing India’s vision of a ‘Viksit Bharat’ by supporting inclusive growth and development, while promoting livelihoods and employment.

Bold initiatives including the huge income tax relief to the middle class with no income tax up to ₹12 lakh and indirect tax changes in the form of reduced customs duties on several consumer products are extremely welcome measures that will strongly boost consumption in the economy, by enhancing personal disposable incomes. It is commendable that despite the economic expansion measures, the Budget adheres to a path of fiscal consolidation, with the fiscal deficit target reduced to 4.4 per cent of GDP in 2025-26 from 4.8 per cent of GDP in 2024-25.

At the same time, the Government continued its focus on infrastructure-led development with the capital expenditure target set at ₹ 11.2 trillion for 2025-26, an increase of 10.08 per cent from the previous year.

A host of forward-looking measures in the Union Budget with a strong emphasis on manufacturing, exports and investments will enhance India’s integration into global value chains. On the other hand, proposals to boost social sectors such as health and education will nurture young talent, promote innovation and accelerate long-term economic growth.

The National Manufacturing Mission is in line with CII recommendations and aims to create a dynamic and vibrant MSME sector with measures such as promoting ease and cost of doing business, creating a future-ready workforce and a focus on digital public infrastructure. These in turn will revitalize India’s manufacturing sector and provide a strong impetus to Make in India.

The measures focused on innovation including the ₹20,000 crore for implementing private sector-driven research, setting up of 50,000 Atal Tinkering Labs in Government schools and a Deep Tech Fund of Funds for catalysing next-gen startups will enhance research and development and create a resilient and self-reliant India. CII is happy to note the Budget’s focus on labour-intensive sectors such as leather, toys, footwear and textiles as well as tourism, which will help generate large-scale employment and entrepreneurship opportunities while bolstering inclusive growth.

This year’s Budget prioritizes critical growth engines and introduces several development measures for agriculture, urban development, the power sector, mining, and the financial sector as well as regulatory reforms, among others, that will promote global competitiveness and unlock India’s massive growth potential. Overall, the 2025 Union Budget is a holistic, progressive and growth-oriented budget that rightfully focuses on its people and the economy, with an all-encompassing inclusive growth agenda.

This article was written by Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry. It was first published on 2nd February 2025 in The Telegraph

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