'Relief for middle class': How India Inc reacts to Union Budget 2025

The first full budget of Modi 3.0 is here, with Finance Minister Nirmala Sitharaman announcing key measures to drive innovation and entrepreneurship and provide employment and tax relief.

She announced plans to launch a new Rs 10,000 crore Fund of Funds to support startups, providing a significant boost to entrepreneurship in India, which currently ranks as the world's third-largest startup ecosystem.

The minister also announced the establishment of a Centre of Excellence (CoE) in Artificial Intelligence (AI) for Education with a total outlay of Rs 500 crore. This initiative builds on the three AI centres set up in 2023 for agriculture, healthcare, and sustainable cities.

Sitharaman also announced that incomes up to Rs 12 lakh per annum will be tax-free under the new tax regime, with salaried individuals benefiting from an increased exemption limit of Rs 12.75 lakh, including the standard deduction.

India Inc. has welcomed the new changes in the Union Budget, especially the new reforms to boost private domestic consumption. Here’s what they all have to say:

Sharing his thoughts on X, Snapdeal’s Kunal Bahl said, “Great news that the FM has expanded the Fund of Funds by another ₹10,000 crore. This has been a force multiplier for the domestic venture capital ecosystem & will continue to be so. Domestic capital needs to be the bedrock for Indian startups.”

Dhiresh Bansal, Chief Financial Officer, Meesho

“We welcome the Union Budget 2025-26 for its strong push for MSME growth, digital commerce, and boosting consumption for mass Indians. Increasing the investment and turnover limits for MSME classification is a game-changer that will drive scale, innovation, and job creation. The big boost for sectors such as toys, footwear, and many others will lead to improved domestic capabilities in manufacturing and exports.”

Prateek Maheshwari, Co-founder, PhysicsWallah; Chair of the India EdTech Consortium

“The expansion of IITs and 75,000 additional medical seats over five years is a crucial step in reducing medical student outflow to other countries, given that over 23 lakh students appear for NEET, but only 1.1 lakh seats are available. The Bharatiya Bhasha Pustak Scheme will enhance regional language learning, while 50,000 Atal Tinkering Labs in government schools will foster scientific temper and innovation. Broadband connectivity in secondary government schools can be a game-changer, enabling affordable, high-quality, and personalised digital learning solutions.”

Neha Singh, Co-founder, Tracxn

“The decision to double the credit guarantee limit to Rs 20 crore from Rs 10 crore stands out as a game-changer, easing the path for startup MSMEs to secure essential working capital without compromise. The allocation of Rs 20,000 crore towards private sector R&D and innovation, coupled with the introduction of a Deep Tech Fund of Fund and the establishment of a fresh 'Fund of Funds for Startups', underscores a resolute commitment to fuelling entrepreneurship in our country. The provision for supporting 5 lakh first-time entrepreneurs from underrepresented backgrounds showcases a dedication to nurturing diversity and inclusivity in the startup ecosystem.”

Manish Aggarwal, Co-Head – Deal Advisory, KPMG in India

"Budget 2025 is a well thought out, comprehensive growth-oriented budget, pushing both the critical wheels of the Indian economy—capex and consumption—while maintaining the fiscal discipline. A major boost was provided to infrastructure investments, with a focus on manufacturing, especially in the power sector (more so in the nuclear sector), allied cleantech manufacturing and shipping sector. Reforms in PPPs and a rebooted asset monetisation pipeline to unlock private capital in infrastructure are very heartening to note."

Rikant Pittie, Co-founder and CEO, EaseMyTrip

"The Union Budget 2025-26 presents a transformative vision for India's travel and tourism sector, reinforcing its role as a key driver of economic growth and employment. The expansion of the UDAN scheme, connecting 120 new destinations and enabling 4 crore additional passengers over the next decade, will significantly enhance regional connectivity, making travel more accessible and affordable for millions."

Moreover, the proposed development of 50 top tourist destinations, coupled with performance-linked incentives for states, streamlined e-visa facilities, and visa-fee waivers, will position India as a more attractive global travel destination by easing out travel infrastructure... With a focus on seamless travel, enhanced infrastructure, and an enabling policy framework, this Budget lays a strong foundation for a new era of tourism-led economic growth, ensuring India remains a top destination for both domestic and international travellers."

Akash Sinha, Co-founder and CEO, Cashfree Payments

"The launch of a new ‘Fund of Funds’ will energise the startup ecosystem, enabling the creation of the next wave of tech and deep-tech ventures. Also, the introduction of a revamped central KYC system will drive greater transparency and trust within the financial ecosystem. Establishing a Digital Public Infrastructure for international trade will simplify cross-border financing, enhancing India’s role as a key player in global commerce. These initiatives will boost India’s fintech growth and strengthen its role in the digital economy."

Saunak Saha, Partner - Climate Change and Sustainability Services, EY India 

“Budget 2025 is a game-changing moment for the electric vehicle (EV) sector, particularly with the introduction of BCD (Basic Customs Duty) cuts on materials required for Li-Ion batteries. This will significantly lower production costs and help accelerate the growth of a zero-emission vehicle ecosystem in India. The full exemption of customs duty on 35 capital goods for EV manufacturing, combined with the rs 10,000 crore Clean Tech Mission, is set to drive innovation and create a self-sustaining, local ecosystem for EV batteries, motors, and controllers. This will reduce our reliance on imports and make cutting-edge, sustainable technology more accessible to manufacturers, paving the way for a truly green future."

"The Budget also shines a spotlight on MSMEs, particularly in the auto component sector, with easier credit access and a doubled credit guarantee cover to Rs 10 crore. This will empower smaller component manufacturers to scale up and contribute to India’s clean mobility transition,”

Yashasvi Sharma, Partner – Entrepreneurial and Private Businesses, PwC India 

“The Indian entrepreneurial and private businesses will benefit from the government’s sharp focus on enhancing ease of doing business and setting up of National Manufacturing Mission. More importantly, the significant income tax relief to the middle class will boost consumption and encourage capital investments. The government’s particular focus on Industry 4.0, cleantech, and electronics manufacturing augurs well for India’s global positioning.”

Ankur Bansal, Managing Director, BlackSoil

"The proposed DeepTech Fund of Funds is a timely and promising initiative, especially amid the global AI race… DeepTech startups, with their potential to address critical challenges in climate, healthcare, food security, and national security, require patient capital and long-term support. The fund's effectiveness will depend on detailed guidelines that support long-tenured investments, enabling startups to realise their transformative potential fully."

Asheesh Gupta, Founder and CEO, Samarth Eldercare

“The Finance Minister set her priorities clearly at the outset, focusing on the poor, youth, farmers, and women. While the elderly were not specifically mentioned, the proposals aim more at simplification than direct financial relief. That said, there is still reason for optimism. Strengthening healthcare infrastructure, setting up cancer daycare centres, reducing duties on life-saving medicines, and extending benefits to gig workers—potentially including eldercare professionals—could bring much-needed support to senior citizens in an indirect but meaningful way.”

Pratip Majumdar, Partner, Inflexor Venture

“A Rs 10,000 crore infusion into a new Fund of Funds announced by Finance Minister Sitharaman alongside tailored schemes for female entrepreneurs & first-time entrepreneurs from underrepresented communities, is exactly the kind of bold step India needs to fuel the next wave of disruptive startups. Access to capital has long been a roadblock, and by moderating guarantee fees and doubling credit limits for startups, the government is signalling strong intent to de-risk early-stage ventures. We see immense potential in sectors like clean tech manufacturing, where policy support under the National Manufacturing Mission will further India’s ‘Make in India’ vision while driving long-term, sustainable growth.”

Mayuresh Raut, Managing Partner, Seafund

“This additional Rs 10,000 crore [Fund of Funds], along with the Rs 20,000 crore set aside for innovation and the deep tech Fund of Fund will enable the government to position the investment ecosystem for the next 5-7 years to bet on startups that address our key requirements on AI, space, semiconductors, and climate."

Vikram Gupta, Founder and Managing Partner, IvyCap Ventures

“Raising FDI in insurance to 100% (with local investment conditions) could unlock more funds for startups, while tax clarity for AIFs, and the removal of TDS on securities returns encourage venture capital growth.

IIT expansions, AI and deep tech CoEs, and increased medical education seats enhance India’s talent pipeline. Extended tax benefits for startups until 2030 and rationalised income tax brackets will support business growth and consumer spending.

IFSC reforms, including extended tax exemptions in GIFT City and eased fund management rules, boost India's financial hub potential. TCS rationalisation for students studying abroad aids education access.

Overall, the budget drives innovation, capital access, and regulatory clarity, fostering a thriving startup ecosystem.”

Anirudh A. Damani, Managing Partner, Artha Venture Fund

“This budget is nothing short of transformative—it covers a wide spectrum of critical areas, from tax simplification to deep-tech investments, infrastructure, and energy expansion. The increase in income tax exemption to Rs 12.75 lakh is a bold, economy-igniting move that puts more money in the hands of salaried individuals, fuelling consumption and economic momentum. The renewal of the ₹10,000 crore Fund of Funds and the focus on deep-tech funding will provide much-needed capital to early-stage ventures and India’s next wave of innovation.” 

“The next big moment to watch will be the income tax bill set to be tabled next week, which could further revolutionize India’s tax system. Overall, this budget sets the foundation for sustained, long-term economic growth.”

Gopal Jain, Managing Partner, Gaja Capital

“The growth-focused Budget 2025 ensures policy continuity while maintaining fiscal discipline, growth, and inflation control… The shift to a “light-touch regulatory framework” promotes a business-friendly environment, enabling long-term economic expansion. With strategic investments and fiscal prudence, the budget lays a strong foundation for sustainable growth and private sector participation.”

Ajay Vij, Senior Country Managing Director, Accenture in India

“The announcements to set up five National Centres of Excellence for skilling, Atal Tinkering Labs to foster innovation, deep tech Fund of Funds, and setting up of the CoE in AI for Education will create a systematic and progressive movement towards building future-ready skills needed for an AI economy. These will harness the power of emerging technologies to unlock innovation, as well as drive sustainable growth for the country. With responsible use of Gen AI expected to add an extra $675 billion in economic value to India by 2038, these measures will help build a future where technology and human potential go hand in hand.”