Budget 2025: Industry calls for simplification of tax rules to boost consumer demand

As Finance Minister Nirmala Sitharaman gets ready to present the Union Budget for 2025-26 on February 1, the industry has presented its Budget wishlist, which includes simplification of tax rules, revisiting income tax slabs to boost consumer demand, clear regulatory frameworks for digital assets, prioritize infrastructure spending, introducing tax incentives for adopting digital marketing tools, and much more.

Here’s what business heads across sectors put forth as their expectations from Budget 2025...

Anand Jain, Co-Founder and Chief Product Officer, CleverTap:

“With the upcoming budget, it’s crucial to prioritize emerging sectors like SaaS, Web3, and AI. Together, they are transforming industries and positioning India as a global technology leader. Clear regulatory frameworks for digital assets, smart contracts, and SaaS platforms will help foster innovation, attract investment, and enhance competition in these high-growth areas. As a SaaS company, we see immense potential in policies that drive the adoption of cutting-edge technologies like AI.

Initiatives such as the Centers of Excellence for Artificial Intelligence, the INDIAai mission and the ‘Make AI in India’ programs are commendable. Expanding incentives for AI-driven solutions across governance, education, and healthcare could further accelerate India’s digital transformation and solidify its leadership in the global AI landscape.

At the same time, the reduction in LTCG tax rates for unlisted shares to 12.5% last year was a positive step. Simplifying compliance, stimulating innovation, and ensuring access to funding are essential for empowering startups and MSMEs to create transformative solutions for the world. Additionally, extending the ESOP tax deferment policy to all DPIIT-recognized startups would also help attract and retain top talent, addressing a critical challenge in today’s ecosystem.

From a broader perspective, revisiting income tax slabs should also be a priority. With rising living expenses significantly reducing disposable income, consumption has slowed, impacting economic momentum. Providing relief through taxation adjustments would help ease financial pressures, encourage spending, and drive growth across sectors. A more progressive framework could further boost demand, benefiting businesses, including startups and MSMEs.”

Satyen Momaya, CEO, Celio India:

“The retail sector has immense potential to drive India’s growth and employment. To harness this, we urge the government to boost consumer demand by reducing individual income tax and interest rates.

The apparel and lifestyle retail segment, impacted by subdued demand over the last 12-18 months and inflation, would greatly benefit from retaining the current GST slabs, especially for products priced at ₹1,000 and above.

We also anticipate the swift implementation of a National Retail Policy to streamline operations and foster long-term growth. These measures will enable the retail sector to contribute meaningfully to economic progress and job creation across the country.”

Umesh Revankar, Executive Vice Chairman, Shriram Finance Limited:

“We anticipate that the upcoming Union Budget will prioritize infrastructure spending, which will significantly benefit our lending segments, particularly small businesses, contractors, and transporters. This focus on infrastructure is expected to lead to a surge in demand for steel, cement, and other materials, further driving demand in vehicle finance and other sectors reliant on bulk materials. This will not only boost economic activity but also create substantial employment opportunities, especially in semi-urban and rural areas. We foresee new vehicle sales growth in Q4 to be in double digits year-on-year, as we expect government spending on infrastructure to be much higher than previous quarters.”

Pali Tripathi, CEO, Taabi Mobility Limited (RPG Group):

“As India continues to position itself as a global leader in technology-driven industries, the logistics sector presents a unique opportunity to unlock massive growth and innovation. The upcoming Union Budget holds the potential to propel India into the forefront of logistics technology by supporting the integration of emerging technologies like AI, IoT, robotics, automation, and 5G.

At Taabi.ai, we believe that strategic investments in these technologies will revolutionize the logistics ecosystem, making it more efficient, sustainable, and globally competitive. To achieve this, we urge the government to prioritize the development of a National Technology Strategy for Logistics, enabling the seamless integration of cutting-edge technologies into the sector. Establishing a National Logistics Technology Council will ensure coordination between the government, industry, and academia, facilitating the creation of a robust framework that aligns with global standards.

A key focus should be on building technology-driven infrastructure, including smart logistics parks, IoT-enabled transport systems, and advanced port and highway technologies. This will not only improve operational efficiency, but also reduce the carbon footprint of logistics operations, contributing to the nation’s sustainability goals. Additionally, by enhancing Dedicated Freight Corridors (DFCs) with automation and real-time data analytics, we can significantly reduce transit times and costs, further boosting India’s logistics competitiveness.

Tax incentives and subsidies for logistics companies adopting AI, IoT, and robotics will accelerate the adoption of these technologies across the sector. A government-backed logistics technology innovation fund will support startups and SMEs, empowering them to develop new solutions and bring innovations to market faster.

We also advocate for fostering Public-Private Partnerships (PPP) to drive the development of autonomous vehicles, drone-based delivery systems, and real-time predictive analytics. These collaborations will help position India as a global testbed for logistics technologies, offering regulatory sandboxes for innovation while ensuring safety and compliance. Furthermore, skill development is critical. The budget should focus on launching specialized training programs to equip the logistics workforce with expertise in emerging technologies like AI, robotics, and automation. This will ensure that India remains at the cutting edge of logistics innovation.

Lastly, we call for increased investment in green technologies and sustainable logistics solutions, such as electric and hydrogen-powered vehicles and AI-based route optimization to reduce emissions. By focusing on these areas, India can position itself as a global hub for sustainable and efficient logistics.

We look forward to the Union Budget creating a comprehensive roadmap to position India as a global leader in logistics technology, driving innovation, efficiency, and sustainability for the future.”

Rahul Thomas, Whole-Time Director of Suraj Estate Developers:

“The real estate sector has high hopes for the upcoming Union Budget 2025, anticipating measures that will truly address long-standing challenges and help drive growth. Last year’s budget laid a good foundation with its focus on affordable housing and infrastructure, but now is the time for more impactful reforms, especially with the rising luxury housing market.

Luxury homes are seeing a big surge in demand, with today’s homebuyers seeking not just comfort but a lifestyle that embodies both luxury and sustainability. If the budget includes a stronger push for sustainable, green construction and urban development, it could open doors to new opportunities while addressing environmental concerns. This budget has the potential to move beyond incremental changes and truly redefine the future of India’s real estate sector, making it more dynamic, inclusive, and future-ready. However, the specific details will depend on the government’s priorities and the overall economic situations.”

Shashank Paranjape, MD, Paranjape Schemes Construction Ltd:

“With the government’s ongoing focus on urbanization, housing, and sustainability, we remain optimistic about initiatives that could further boost the Real Estate sector. Key areas of interest for us include tax benefits for homebuyers, increased incentives for affordable housing and green building initiatives, and enhanced ease of doing business for developers.

From our perspective, as we plan to launch several new projects in 2025, it is critical to assess how government policies might influence market sentiment, pricing structures, and customer buying potential. Reforms in stamp duty, and simplified GST regulations for under-construction properties would be welcome changes, enabling us to deliver even greater value to our customers.

Furthermore, we are also looking for targeted incentives for special projects like Athashri (senior living) and Swaniketan (homes for differently-abled). A forward-thinking and inclusive budget will surely serve as a catalyst for long-term growth in the sector and contribute to broader economic progress.”

Ajay Agrawal, MD, BramhaCorp Ltd:

“The upcoming Union Budget 2025 holds immense promise for India’s real estate sector, especially as it seeks robust reforms to strengthen housing infrastructure and encourage sustainable urban development. Industry stakeholders anticipate increased tax incentives for affordable housing, policies to simplify land acquisition, and measures to promote green building practices. Incentivizing real estate investment trusts (REITs) could further boost commercial realty. With India’s urban population growing rapidly, the sector hopes for focused initiatives to address housing shortages and improve infrastructure. A supportive budget could empower the real estate market to remain a cornerstone of India’s economic growth story.”

Abhinav Sehgal, Founder, SEO Designs and DigiUprise:

“The Union Budget 2024-25 offers a pivotal opportunity to uplift the marketing sector during challenging economic times. Tax cuts for individuals could boost disposable incomes, driving higher consumption and advertising investments. Simplified GST compliance and reduced rates for advertising services would ease operational pressures and support profitability. Additionally, introducing tax incentives for adopting digital marketing tools can empower businesses to embrace innovation and enhance competitiveness. A consideration of tax exemptions or reduced GST for marketing services would further ease financial strain and catalyze growth across industries relying on advertising to reach consumers.”

Gaurav Dagaonkar, Co-founder & CEO, Hoopr:

“Last year’s budget introduced several encouraging measures for the startup ecosystem, such as the extension of tax benefits for startups, a focus on developing digital infrastructure, and the establishment of a ₹1 lakh crore corpus for low-interest loans to startups. Building on this momentum, I am eagerly anticipating the upcoming Union Budget.

For music-tech startups like ours, initiatives that further simplify and strengthen intellectual property regulations, provide access to affordable capital, and incentivize innovation in areas like AI and music technology will be crucial. We need a policy framework that not only supports the growth of India’s ₹10,000 crore creator economy but also fosters responsible innovation and empowers creators to thrive.

I am hopeful that the upcoming budget will continue to create a conducive environment for the music-tech sector to flourish and contribute significantly to India’s economic growth.”

Aditya Kandoi, Founder and CEO, Redcliffe Labs:

“There exists a pressing need to fortify healthcare infrastructure in Tier 2, Tier 3, and smaller towns, which collectively accommodate over 65% of the Indian population. Targeted investments in these regions, bolstered by public-private partnerships, have the potential to address significant gaps and render quality diagnostics accessible to underserved communities.

Diagnostics serve as the foundation for timely and accurate treatment; however, high costs often hinder access. We urge the government to consider reducing the taxes on diagnostic equipment, reagents, consumables, and extending tax exemptions for day-to-day operations. Such measures could make diagnostics more affordable, encouraging individuals to prioritize preventive healthcare and mitigating the burden of non-communicable diseases (NCDs) in India, which account for over 60% of preventable deaths.

Increased budgetary support for research and development in fields such as genomics, AI-driven diagnostics, and digital health tools, including telemedicine, can position India as a global leader in healthcare innovation. These investments will not only enhance patient care but also promote long-term sustainability within the sector.”

Tejas Patil, Founder, Arbour Investments:

“As we approach the Union Budget 2025, the real estate sector, currently contributing approximately 7.3% to India's GDP and projected to reach 13% by 2025, anticipates reforms to address persistent challenges and unlock its full potential. This sector is also a significant employment generator, supporting over 50 million jobs, underscoring the need for focused policy attention.

A critical expectation is the granting of ‘Industry’ status to real estate, which can streamline access to institutional finance, potentially reducing borrowing costs and enhancing transparency. Furthermore, increasing the tax exemption limit for housing loans from ₹2 lakh to ₹3 lakh could spur demand for residential properties, making homeownership more affordable for the middle-income segment.

Amendments to GST regulations, such as allowing input tax credit on under-construction properties, can reduce costs for developers and end-users. Additionally, reducing the GST rate on cement from the current 28% to 18% would lower construction costs, thereby promoting growth in the housing sector.

Infrastructure development should remain a priority, with increased budgetary allocations for urban renewal projects and connectivity initiatives. The previous year's capital expenditure saw a significant increase, and a similar push this year could accelerate growth, particularly in Tier 2 and 3 cities.

Lastly, fostering private investments through Alternative Investment Funds (AIFs) and offering tax incentives to institutional investors will ensure liquidity and enable ambitious projects.

We hope the upcoming budget takes these transformative steps, empowering real estate to remain a cornerstone of India’s growth story.”

Samrath Singh Kochar, Founder and CEO, Trontek:

“With the Union Budget around the corner, we hope to see a robust push for the electric vehicle (EV) and energy storage sectors, aligning with India's goals for a sustainable and energy-efficient future. At Trontek, we are committed to driving this transformation through our cutting-edge battery solutions, specifically designed to enhance the performance and reliability of electric vehicles. As India’s EV industry grows, the need for high-quality, long-lasting batteries becomes even more critical.

We believe the upcoming budget should continue to incentivize the development and adoption of advanced battery technologies, ensuring that we remain self-reliant and reduce dependency on imports. Furthermore, support for sustainable energy storage solutions will empower not just EVs, but also other sectors such as renewable energy and backup power systems. Trontek is ready to contribute to India’s energy transition, and we look forward to the government’s initiatives that can accelerate the growth of cleaner, greener technologies.”

Nikhil Khurana, Founder & CEO, Folks Motor:

“With the upcoming Union Budget, we anticipate stronger support for clean and sustainable mobility solutions, particularly in the EV sector. At Folks Motor, we are leading the charge in transforming traditional vehicles into hybrid-electric models through our innovative retrofit technology. Our xEV solutions enable vehicles to reduce fuel consumption and cut emissions significantly, providing a greener and more cost-effective alternative to conventional transportation. We hope the government will further help in the adoption of retrofitting, tax benefits for hybrid-electric vehicles, and expansion of charging infrastructure.

These initiatives can accelerate the adoption of xEVs and Evs, making clean mobility solutions accessible and affordable for all. We are committed to contributing to India’s vision of a sustainable future and look forward to seeing measures that support this shift towards eco-friendly transportation in the upcoming budget.”