A Step Closer To Viksit Bharat — A Brief Overview Of Budget 2025

The ultimate resource in the economic development of a nation is its people. Recognising this, the Indian Government, in its 2025 Budget, reaffirmed its previous focus on a more holistic approach to GDP—Governance, Development, and Performance—alongside the pursuit of high Gross Domestic Product growth. This year's Budget appears to be primarily centered on four key areas — agriculture, Micro, Small, and Medium Enterprises, investments, and exports, with the overarching goal of achieving ‘Viksit Bharat’ by 2047. 

The Budget appears to have prioritised the agriculture sector more than any other, with a clear focus on increasing productivity and developing modern digital infrastructure. To achieve this, the government has encouraged cooperatives and startups to drive innovation through technology. Additionally, the services of India Post Payments Bank have been extended to rural areas, further enhancing financial accessibility in the sector. 

The introduction of development agricultural programmes and ‘Rural Prosperity and Resilience’ programme will address underemployment in agriculture through skilling, investment, technology, and invigorating the rural economy. The ultimate goal is to make the rural areas Atmanirbhar so that migration to tier-1 cities is just an option and does not become a dire necessity. 

With over 1 crore registered MSMEs employing 7.5 crore people, the Budget emphasised strengthening and advancing the sector to align with global standards. It introduced credit guarantee schemes and continued guarantee coverage during periods of financial stress. The Budget also aimed at providing an enhanced credit guarantee cover of Rs 10 crore from Rs 5 crore, leading to additional credit of Rs 1.5 lakh crore in the next five years. As India emerges as a global trade hub, empowering MSMEs to compete internationally by meeting their investment needs, enhancing technology, and easing regulatory constraints will be a crucial step toward continued economic growth. 

One of the misses of the Budget was not fast-tracking the National Retail Policy, which is contemplated to streamline and simplify retail trade. However, with the government’s intention of ease of doing business, the industry could still be hopeful for implementation of the said policy.   

Indian startups are being prioritised with a strong focus on technological innovation and improved access to capital and investment. To further support this, a new fund of funds has been introduced with an expanded scope and an additional contribution of Rs 10,000 crore. These funds are expected to receive commitments exceeding Rs 9 lakh crore.

Additionally, a new scheme has been introduced to support first-time entrepreneurs from Scheduled Castes, Scheduled Tribes, and women. Under this initiative, loans of up to Rs 2 crore will be provided over the next five years. Training programs focusing on online capacity building, entrepreneurship, and managerial skills will also be offered. These will help Indian startups expand and receive the necessary support to compete effectively in global markets. 

Recent Budgets have acknowledged the importance of a robust financial sector in addressing the nation's needs. To align with the sector's growth, the government has proposed redefining the role of existing regulators and establishing a principle-based framework. To emphasise the significance of this initiative, a high-level committee will be set up to review regulations, certificates, and licenses in the non-financial sector. 

The role of technology in the regulatory and governance space was highlighted to create more inclusive, efficient and participative governance. Very recently, regulators have developed online portals like the PRAVAAH portal and SEBI Intermediary Portal to maintain coordination between various regulatory departments. The technology play in the regulatory space will increase in the near future.   

With the goal of positioning India on the global stage, the FDI limit in the insurance sector has increased from 74% to 100%. This move is expected to attract greater investments from major global insurance players and enhance capital flow diversification within the sector. 

As the financial and corporate space get more liberal, increased focus on compliance surveillance and heightened monitoring of investments in sensitive sectors can also be put to light.    

To streamline the corporate sector, requirements and procedures for quick approval of company mergers have been simplified. The scope for fast-track mergers will be expanded, making the process more straightforward. This approach has already been effectively adopted by major companies in India and is expected to greatly benefit the restructuring of large conglomerates within the country. 

As outlined in the Interim Budget, Bilateral Investment Treaties were signed with two countries in 2024 to foster sustained foreign investment, in line with the ‘First Develop India’ initiative. The Government also plans to revamp the existing model BIT to make it more investor friendly. 

The Budget is aspirational and focuses on key areas essential for sustained growth. The real challenge lies in effectively implementing the proposed initiatives and policy changes while ensuring widespread reach and maximum benefit for the nation's development.  

Moin Ladha is partner and Tanish Prabhakar is senior associate at Khaitan & Co.

Disclaimer: The views expressed here are those of the author, and do not necessarily represent the views of NDTV Profit or its editorial team.