Industry-wise Expectations from Budget 2025

The Union Budget 2025 comes at a critical juncture, reflecting India’s aspirations for robust economic growth, fiscal prudence, and inclusive development. As the nation strives to consolidate its post-pandemic recovery, this budget is anticipated to address pressing challenges across industries, enhance social welfare measures, and pave the way for sustainable progress. With a focus on fostering innovation, boosting infrastructure, and empowering citizens, Budget 2025 is poised to shape the trajectory of India’s economic future while addressing the needs of businesses, the salaried class, and the underprivileged alike.

Real Estate

The real estate and infrastructure sector is hoping for significant measures in Budget 2025. Increased allocation for affordable housing under schemes like the Pradhan Mantri Awas Yojana (PMAY) could boost access for the economically weaker sections. Additionally, streamlining approval processes through single-window clearance mechanisms and offering incentives for Real Estate Investment Trusts (REITs) are expected to attract more investors. Expanding funding for the Smart Cities Mission, with a focus on sustainability and green energy, will also be a critical step in modernizing urban infrastructure.

The National Real Estate Development Council (NAREDCO) has urged the government to increase the deduction on housing loan interest payments under Section 24(b) from ₹2 lakh to ₹5 lakh. Such a move would make homeownership more affordable, especially for the middle class. NAREDCO has also requested the government to grant infrastructure status to the housing sector, which would facilitate easier access to financing for developers and boost the sector’s growth.

Mutual Fund

The mutual fund industry, represented by the Association of Mutual Funds in India (AMFI), has highlighted the need to reinstate earlier tax rates on capital gains. The recent increase in short-term capital gains tax from 15% to 20% and long-term rates from 10% to 12.5% has significantly raised investor tax liabilities. AMFI has also requested a reduction in the Securities Transaction Tax (STT) for arbitrage and equity savings funds to promote greater investor participation and make these instruments more attractive. Additionally, the industry is advocating for the restoration of indexation benefits for long-term capital gains (LTCG) on debt mutual funds. This change would align mutual fund taxation with other investment instruments and encourage retail participation.

Renewable Energy

The renewable energy sector, particularly the electric vehicle (EV) industry, expects key announcements to accelerate growth. Pratik Kamdar, CEO of Neuron Energy, emphasized achieving GST parity for EV batteries, which could reduce production costs and make EVs more affordable. Extending FAME II timelines, prioritizing charge point operators under priority sector lending, and introducing budget-backed incentives for local EV battery manufacturing are crucial to enhancing India’s EV ecosystem. Subsidies for green hydrogen production and policies promoting solar panel installations could also align with India’s climate action goals.

Tourism

The heritage tourism sector is seeking financial incentives to unlock its full potential and revitalize India’s rich cultural heritage. Tax breaks or subsidies for transforming old properties into thriving tourism hubs could incentivize preservation and promote sustainable tourism. Sonali Sethi, Head of Strategic Initiatives at Seclude Hotels Home Style, advocated for decongesting popular destinations like Shimla and Nainital by building infrastructure in unexplored gems such as Ramgarh, Palampur, and Pangot. Promoting these lesser-known destinations with better roads and connectivity could transform them into must-visit locations while reducing pressure on overburdened hotspots.

Expectations of Salaried Public from Budget 2025

Salaried individuals are looking for significant income tax relief in Budget 2025. Raising the basic exemption limit from ₹2.5 lakh to ₹3.5 lakh and revising tax slabs under the new tax regime would help ease the burden on middle-income groups. Furthermore, increasing the standard deduction from ₹50,000 to ₹75,000 could address the rising cost of living.

Enhancements in tax deductions and exemptions are also highly anticipated. Raising the Section 80C limit from ₹1.5 lakh to ₹2.5 lakh would provide individuals with greater opportunities to save through instruments like PPF, ELSS, and fixed deposits. Similarly, increasing the housing loan interest deduction under Section 24(b) from ₹2 lakh to ₹5 lakh could make homeownership more affordable and support the real estate sector.

In the era of remote work, salaried professionals are also expecting work-from-home allowances. A flat annual deduction of up to ₹50,000 for expenses like internet, electricity, and furniture could bring relief to employees working remotely. Additionally, higher deduction limits under Section 80D for medical insurance premiums and introducing tax benefits for preventive healthcare expenses would help manage rising healthcare costs.

There is also hope for the restoration of indexation benefits for long-term capital gains tax on debt investments, including mutual funds, which would allow taxpayers to adjust gains for inflation, reducing their tax liability. This measure would encourage salaried individuals to diversify their investments while addressing concerns about high taxation.

Expected Highlights of Budget 2025

The government is expected to prioritize economic growth by increasing capital expenditure to ₹10 lakh crore, focusing on sectors like roads, railways, and renewable energy. Public-private partnerships (PPP) are likely to play a pivotal role in implementing large-scale infrastructure projects, attracting private investments, and creating jobs.

Tax reforms will remain a central theme, with expectations of a simplified GST structure and wider exemptions for essential goods and services. The government may also introduce AI-driven platforms to enhance tax compliance and reduce evasion, ensuring higher revenue collection.

With sustainability becoming a global priority, Budget 2025 is expected to take bold steps toward a green economy. Doubling allocations for renewable energy projects, introducing tax-free bonds for green initiatives, and promoting carbon trading exchanges will help India achieve its climate goals. Subsidies for EVs and green hydrogen production will also be a significant focus.

In the area of social security and employment, the government may allocate ₹5,000 crore to skill development initiatives in high-demand fields like AI, robotics, and green energy. Expanding rural employment schemes such as MGNREGA and PMEGP is expected to provide more job opportunities in underserved regions.

Finally, digital and financial inclusion will be a key priority. Setting up digital-only banks, expanding UPI adoption among small businesses, and incentivizing digital transactions in rural areas could further India’s progress toward a digitally inclusive economy.

This budget holds the promise of addressing the aspirations of industries, salaried individuals, and the broader economy while balancing growth and sustainability.