Industry leaders react to the Union Budget 2025-26
- Anmol Yadav
- Feb 1
- 20 min read
Updated: Feb 4
"The Union Budget 2025-26 has emphasized economic growth and inclusive development, but the absence of specific measures for the real estate sector is a missed opportunity. While the ₹1 lakh crore Urban Challenge Fund is a step in the right direction to transform cities into growth hubs, the sector was expecting direct incentives such as industry status, single-window clearances, and increased tax benefits for homebuyers.
The increase in the income tax exemption limit to ₹12 lakh per year is a significant relief for the middle class. This will not only improve disposable incomes but also provide a much-needed boost to affordable and mid-income housing projects, encouraging homeownership. Moreover, the rationalization of TDS and the relief provided to the middle class through tax reductions will further boost spending power, indirectly benefiting housing demand.
A notable highlight is the progress under SWAMIH which has completed 50,000 homes in stressed projects and will deliver 40,000 more in 2025, easing financial strain on homebuyers. The ₹15,000 crore SWAMIH Fund 2 will accelerate the completion of another one lakh homes, benefiting middle-class families and boosting market sentiment.
Additionally, the announcement of a new Fund of Funds (FoF) with an expanded scope and fresh contribution of ₹10,000 crore will have a spillover effect on the start-up ecosystem and may drive innovation in PropTech, enhancing technology-driven solutions in real estate and improving efficiency in project execution and homebuying experiences.
However, we urge the government to consider targeted interventions to address liquidity concerns, expedite approvals, and create a more robust framework for real estate investments.”
"The increased infrastructure spending and PPP initiatives are welcome moves that will facilitate urban development. However, the real estate sector was expecting much-needed reforms in stamp duty rationalization, higher home loan interest deductions, and incentives for rental housing. While the rationalization of TDS and higher exemptions for the middle class will provide liquidity, a more direct stimulus to the sector could have accelerated investment and demand. We hope the government considers mid-year policy interventions to support real estate growth."
"The budget once again misses the opportunity to introduce dedicated incentives for NRIs and HNIs, who play a crucial role in the luxury housing segment. Streamlining taxation policies and easing investment norms for these investors could have significantly boosted investments in this segment. The rationalization of TDS and tax relief for the middle class will improve disposable incomes, indirectly benefiting housing demand. The Urban Challenge Fund will help in urban renewal, but specific measures to encourage luxury and second-home investments were needed. While the government’s commitment to infrastructure and PPP-driven development is commendable, the lack of direct incentives for real estate is disappointing."
"The budget's focus on infrastructure and PPP-driven urban transformation is a positive step, but the real estate industry was expecting more direct support. The rationalization of TDS and tax benefits for the middle class will improve disposable incomes, which could have an indirect positive impact on housing demand. However, critical issues such as liquidity constraints, high taxation, and policy bottlenecks remain unaddressed. A more comprehensive real estate policy would have further accelerated sectoral growth."
“The Union Budget 2025-26 has continued to further the goal of ‘Viksit Bharat’ and ‘Sabka Vikas’ through transformative reforms across six key domains including urban & real estate development, power & mining sectors, financial services and taxation as well regulatory reforms. Balanced regional growth across tier I & II cities will be driven by engines such as agriculture, MSMEs, investments and exports. The National Manufacturing Mission, guidance framework for GCCs, start-up focused AIF, SWAMIH 2 fund and Urban Challenge Fund, all hold potential to significantly accelerate real estate growth across multiple real estate segments. The budget has continued to focus on improving the ease of doing business through innovation, technological upgradation and sharing of data between public & private sector establishments. The extension of the SWAMIH fund is a much-expected move as several real, estate projects continue to reel under stress due to funding constraints, delaying delivery of homes. Additionally, rationalization of taxes and enhancement of exemption limits can boost disposable income spurring consumption levels and real estate investments, particularly in residential real estate and alternate financial instruments such as REITs.”
“The Union Budget 2025 focuses on employment generation, boosting domestic consumption, and enhancing connectivity by concentrating on the rapid development of physical infrastructure and increasing disposable income of citizens. This will have a positive impact on increasing demand for all real estate asset classes across the country. Furthermore, the budget has an allocation of INR 15,000 Cr under the SWAMIH Fund for addressing liquidity issues of delayed housing projects. This along with the digitization of land records is expected to strengthen homebuyers' confidence.”
Mr. Rao further added, “Upgradation of infrastructure facilities for air cargo will multiply the demand for warehousing across the country. Focus on setting up GCCs in tier-2 cities will transform the real estate landscape in the emerging cities of India.
“The recent budget introduces much-needed relief, particularly with the zero-tax provision on annual incomes up to Rs 12 lakh—a move that enhances disposable income and is expected to support homebuyers. Additionally, the allocation of Rs 15,000 crore under the SWAMIH Fund for completing 1 lakh stalled housing units is a significant intervention, providing relief to buyers impacted by delayed projects and supporting supply-side stakeholders.
However, additional measures could have further strengthened the sector. Increasing home loan deduction limits would have improved financing accessibility, particularly for first-time homebuyers and end-users. This could have enhanced affordability, eased credit constraints, reduced tax liabilities, and contributed towards meeting the projected demand of 93 million housing units by 2036.”
"The Union Budget 2025-26 takes meaningful steps toward strengthening India’s infrastructure landscape, particularly through the expansion of the Public-Private Partnership (PPP) model and the continuation of the Asset Monetisation Plan. The ₹1.5 lakh crore interest-free loan to states for capital expenditure is a welcome move, as it will encourage long-term investments in critical sectors. Also, the ₹10 lakh crore Asset Monetisation Plan provides a much-needed boost to unlock value from existing assets and reinvest in new projects.
The revision in IT slabs is also a positive step, as it will add more liquidity and encourage wider participation in investments, including structured real estate opportunities. The evolving regulatory and fiscal framework will be crucial in ensuring that private capital finds efficient avenues to participate in infrastructure development. A well-defined regulatory framework will be key, and I’m looking forward to seeing how these policies translate into real investment opportunities."
"We at Indusface commend the government for recognizing the critical role of technology and innovation in driving economic growth. The 2025 Budget’s emphasis on developing Digital Public Infrastructure across key sectors such as credit, education, healthcare, logistics, MSME services, and urban governance reflects a forward-thinking approach. However, while these initiatives are promising, we believe that a more pronounced focus on cybersecurity is essential.
In the past year alone, cyberattacks surged to 7.1 billion, with APIs facing 68% more attacks than traditional websites. Additionally, DDoS attacks rose by 41% to 3 billion incidents, while bot attacks increased by 60%, exceeding 681 million cases. These figures highlight the growing vulnerabilities within our digital ecosystem, especially as more sectors integrate API-driven services and digital platforms.
As digital transformation accelerates, robust cybersecurity measures are crucial to safeguarding our nation’s digital infrastructure. We urge the government to allocate dedicated resources and policies to strengthen our cybersecurity framework, ensuring that our technological advancements remain secure and resilient."
"The Union Budget 2025 introduces transformative measures aimed at strengthening the real estate sector and making homeownership more accessible. The significant tax relief for the middle class—exempting individuals earning up to ₹12 lakh under the new tax regime—is a pivotal step. By easing the tax burden and enhancing disposable income, this move is set to boost household consumption, savings, and investments, thereby fuelling housing demand and overall economic growth.
The Government’s renewed focus on resolving stalled projects is reinforced through the ₹15,000 crore SWAMIH Fund 2.0, targeting the completion of 1 lakh housing units. With the fund already facilitating the delivery of over 50,000 homes and another 40,000 units expected by 2025, this initiative will play a vital role in restoring buyer confidence and improving liquidity in the sector.
Furthermore, the enhanced infrastructure outlay—spanning rural connectivity and new airport expansions—will unlock real estate potential in emerging regions. Improved connectivity not only enhances accessibility but also serves as a catalyst for residential and commercial growth in high-potential markets.
With these strategic interventions, Budget 2025 lays a strong foundation for sustainable growth, reinforcing homeownership aspirations and contributing to India’s broader economic momentum."
"In a major move for the real estate sector, Finance Minister Nirmala Sitharaman has introduced key measures in Budget 2025, providing much-needed support to both primary and secondary market homebuyers. The launch of SWAMIH Fund 2 is set to be a game-changer, injecting confidence into the market and ensuring stalled projects receive financial backing. This initiative is expected to revitalize the sector, making homeownership more accessible and boosting investor sentiment. This will not only fast-track construction but also restore confidence in the real estate market."
The Finance Bill 2025 proposals mark a directional shift towards a growth strategy based on consumption rather than government led capital expenditure. In the last few years the government has made significant investment in infrastructure to boost growth. This was necessitated by softness in private investment evidenced by slow capex and credit growth. While the growth figures have been encouraging, the government’s ambition of achieving growth rates close to double digits remains a far cry. This budget demonstrates a change of gear - a greater reliance on private sector and domestic consumption to boost higher levels of growth. The government has projected a revenue reduction of 13 billion US$ on account of reduction of personal income tax and corresponding reduction in government capital expenditure.
Reduction in personal income taxes is likely to jumpstart discretionary spending in sectors like automobiles, FMCG, travel and tourism, quick commerce and affordable housing. One can expect increased investments and M&A in these sectors by large MNCs and funds.
Lowering of individual taxes coupled with commitment to keep fiscal deficit in check through reduced debt displays prudence and is likely to boost sovereign ratings for India leading to increased foreign inflows of capital.
The amendments proposed for improving the tax certainty for MNCs by bringing in block transfer pricing assessments for three years in one go and expansion of safe harbour provisions is likely to improve the foreign investors sentiment. Similarly, reduction of customs tariff structure from 15 to 8 and proposals to improve the ease of mergers and acquisitions will likely enhance pace of investor activity.
On the whole, the budget proposals demonstrate clear strategic thinking, a commitment to prudence and improving the momentum for enhancement of country’s investment climate.
"We welcome the Union Budget 2025-26, which lays a strong foundation for accelerating India’s growth and leading towards the vision of Viksit Bharat. As the fastest-growing major economy, India is poised for growth, with a focus on infrastructure development, manufacturing, and inclusive economic expansion.
Infrastructure remains a key growth driver, and the allocation of ₹1.5 lakh crore in interest-free loans to states for infrastructure projects will catalyze urban redevelopment, regional connectivity, and industrial expansion. The establishment of a ₹1 lakh crore Urban Challenge Fund to transform cities into growth hubs, support creative redevelopment, and enhance water and sanitation infrastructure is a strategic move. We are encouraged by the fund’s capacity to finance up to 25% of bankable projects, driving investments through bonds, bank loans, and PPPs.
The budget's focus on housing reforms, including tax incentives and a broader definition of affordable housing, will make homeownership more accessible, aligning with Emaar India’s mission to deliver quality housing solutions.
We appreciate the recognition of gig workers through initiatives such as healthcare under PM Jan Arogya Yojana and registration on the e-Shram portal. This move will benefit nearly 1 crore gig workers, acknowledging their contribution to India’s digital and service economy.
The next five years present a unique opportunity to drive ‘Sabka Vikas’, and we are optimistic about India's journey toward becoming a global economic powerhouse. At Emaar India, we remain committed to supporting the government’s vision by delivering projects that embody quality, innovation, transparency, and sustainability."
"Finance Minister Nirmala Sitharaman's Budget proposal to raise Kisan Credit Cards (KCC) loan limit to Rs 5 lakh is much needed revision to uplift the condition of our annadatas. We had expected this in the Budget given the government's focus on empowerment of marginalised communities. The move will ensure farmers are able to procure enough credit to increase the productivity, which will give boost to rural economic growth. Additionally, the loan cap within the revised interest subvention scheme will be raised from Rs 3,000 to Rs 5,000 for KCC loans, which will enhance financial assistance for agricultural activities to small farmers, who are most susceptible to risks in farming activities.
We believe the KCC loan limit should be periodically revised in the coming years as well to account for rising inflation. We also need to focus on swift disbursal of these loans, where technology such as AI can be great enablers. Automating KCC loans increase efficiency and satiate the need of farmers on time, reducing the risk of crop failures due to lack of finance during sowing."
"This is a very encouraging budget and shows the government's focus on strengthening the economy and ensuring long-term robust economic growth. Some of the steps taken by the government will significantly boost consumption demand.
The emphasis on infrastructure initiatives and overall capex estimates for the next FY are significant. The heartening thing has been the ability to manage fiscal prudence and reduced fiscal deficit projections in FY25E and FY26. This makes the sustenance of growth more probable and long-term.
The Union Budget 2025-26 was presented in the backdrop of slower GDP growth, higher than tolerable inflation rates and historical lows seen in the Indian Rupee. The issue of reducing private consumption loomed large and could have wider ramifications if not addressed promptly. With that in mind, the government has focused on increasing disposable income and boosting consumption. The highlight of this budget was clearly the reduction in the Income Tax burden on the middle-class which will bear no tax up to an income of INR 12 lakh, fundamentally increasing disposable incomes and boosting consumption.
While the budget did not specifically address affordable housing, the INR 15,000 crore allocation toward the SWAMIH Fund will support the delivery of stressed projects for completion of affordable and mid-income housing project. The government's investor-friendly approach is also apparent in the move to remove the erstwhile tax on deemed rent for two self- occupied properties compared to just one earlier.
The INR 11.21 lakh crore outlay for capital expenditure, which has risen from INR 11.11 lakh crore in FY 2024-25, will continue to support the agenda for infrastructure development of railways, roads, and overall logistics infrastructure of the country. The increase in the credit outlay to states from INR 1.3 to INR 1.5 lakh crore will boost the pace and delivery of infrastructure development across the country.
However, some crucial aspects like sops for affordable housing and a national policy for rental housing would have given a fillip to the Housing for All agenda were not addressed and we hope would be taken up subsequently.
''The Union Budget 2025 has given a strong push to India's startup ecosystem, reinforcing the government’s commitment to innovation-led growth. The expansion of the Fund of Funds with an additional ₹10,000 crore will help deepen capital availability, ensuring startups—especially those in B2B SaaS, enterprise tech, and fintech—have the financial backing to scale. This is a shot in the arm for startup innovation and will strengthen India’s position as a global hub for startups.
The introduction of a new scheme supporting 5 lakh first-time women entrepreneurs with term loans of up to ₹2 crore is another step in the right direction. Entrepreneurship thrives when opportunities are democratized, and this initiative can help foster a more diverse and inclusive startup ecosystem. The addition of online capacity-building programs will further equip these founders with the skills needed to build and scale successful ventures.
With these measures, India’s startup ecosystem is poised for its next phase of growth. The key now lies in swift execution and industry collaboration to ensure these initiatives translate into tangible impact at scale.''
Mr. Rajesh Shah, Chairman & Managing Director of Euro Panel Products Limited, believes the inroads made at the Union Budget 2025 uniquely positions the Indian manufacturing, construction and building materials industries for robust growth, “The introduction of the National Manufacturing Mission will provide critical policy support to various industries, reinforcing India's commitment to becoming a global manufacturing leader. Also, the setup of Urban Challenge fund worth INR 1 lakh crore to redevelop cities positions the building materials and construction industry in a favourable position. The emphasis of each infra ministry to come up with a 3-year list of PPP projects will be an era-appropriate move, furthering the National Manufacturing Mission and Make in India initiatives. These will enable industry stakeholders to scale operations, enhance efficiency, and drive innovation — directly translating to India attracting greater investments, creating high-value jobs, strengthening supply chains and boosting exports.”
We welcome the government’s recognition of the vital role Global Capability Centres (GCCs) play in strengthening India’s economy. The introduction of a national framework to guide states in promoting GCCs—especially in emerging Tier 2 cities—is a significant step toward creating a more uniform and business-friendly ecosystem. By addressing key aspects like talent availability, infrastructure, and regulatory reforms, this initiative paves the way for sustained GCC growth across the country.
The government’s commitment to expanding skilling through five National Centres of Excellence, in collaboration with global expertise, further complements this effort. Ensuring industry-aligned curriculum design, robust skills certification frameworks, and periodic evaluations will be essential in bridging the talent gap and reinforcing India’s position as a global hub for digital transformation.
Importantly, this also eases the variations in different state government policies, notably the GCC-specific policies by Karnataka and measures by Tamil Nadu. This cohesive approach facilitates equitable investment and employment opportunities across India. At Thryve, we look forward to actively contributing to this evolving landscape, strengthening India's GCC ecosystem, and empowering the workforce of tomorrow.
“Spurring urban development is one of the key priorities of the government and the Union Budget lays strong emphasis on this point. With the introduction of the Rs. 1 lakh crore Urban Challenge Fund, coupled with the continued success of the Pradhan Mantri Awas Yojana (PMAY-U), the government is reinforcing its commitment towards enhancing urban infrastructure. Additionally, the significant tax relief measures proposed for the middle class will help in augmenting the disposable income and drive consumption across sectors including housing. At Aadhar Housing Finance, we are excited to align with these progressive steps, thereby strengthening our support towards the government's vision of creating Cities as Growth Hubs,”
“The Union Budget 2025 takes bold steps to foster rural growth, women empowerment, and MSME ecosystem, unlocking significant opportunities for economic growth in Bharat. Easing credit for women, Scheduled Caste and Tribes, and first-time entrepreneurs with loans up to ₹2 Crore, alongside the revamped support for MSMEs, will not only empower local businesses but also ensure a more robust economic framework. The increase in credit guarantee covers, along with the introduction of customized credit cards for micro-enterprises, will provide much-needed relief to entrepreneurs and help sustain business growth in local economies. The announcement to develop Grameen Credit Score framework to serve the credit needs of SHG members and people in rural areas is a welcome step to boost rural economy, especially women economic development through SHG framework. Additionally, the revamped KYC process will streamline business operations, making it more efficient across sectors, while the enhanced PM Svanidhi scheme will support street vendors by encouraging digital payments and reducing reliance on informal credit.
With PayNearby Digital Naari’s focus on bridging the financial, digital and healthcare gaps among women, especially rural women, it is encouraging to see Saksham Anganwadi and Poshan 2.0 programs getting announced. This will work towards improving the nutritional support for women and children, leading to better food security for women. Overall, PayNearby welcomes the focus on women and rural economy, and steps that boost more economic participation by women and drives rural development is important for the next orbit of growth for the country.”
“The role of MSMEs in the journey towards Viksit Bharat has been called out clearly by the Finance Minister and commensurate to that are some of the fiscal and policy measures announced in the budget to boost the backbone of the economy.
Credit & MSME
Availability of credit access, simplification of CKYC and enhancement of credit guarantee covers for MSMEs, startups and exporters stand out as key fiscal support measures from the Government of India. A big increase in Udyam registrations, which is an indicator of extent of formalization of small and medium businesses, is expected with customized credit cards with INR 5L limit being introduced for registered businesses. With the government expecting to give 10 Lakh credit cards in a year, this is going to be yet another measure to incentivize MSME businesses to formalize and have faster access to working capital. The enhancement in the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively will spur widespread adoption of digitization among small businesses and bring them on par in terms of access to commerce and capital.
The Manufacturing Mission to furthering Make in India and Make for the World by improving ease of doing business, create a vibrant MSME ecosystem and improve availability of technology will enhance the credit worthiness of small and medium sized and boost the confidence of financial institutions in doubling up their efforts to lend to MSME. The Economic Survey has already indicated how banks credit to MSMEs has grown 13% y-o-y. Some of the measures announced in the budget will further boost credit for the MSME ecosystem.
DPI
India’s steadfast approach to being recognized as an example in building digital public infrastructure got yet another boost with the announcement of ‘BharatTradeNet’ (BTN) for international trade - a unified platform for trade documentation and financing solutions.”
"The Union Budget 2025 has given much-needed attention to MSMEs, recognizing them as the key driver of India's economy and global competitiveness. The enhancements in definition of MSME, upto ₹125 crore of investment in plant and machinery and an annual turnover of ₹500 crores, will provide much-needed support to MSMEs in scaling operations, embracing new technologies, and accessing capital more efficiently. With new definition the benefit of TReDS will expand to larger set of enterprises for facility of early realisation of their dues from customers, who were earlier deprived of this benefit.
Expanding the credit guarantee cover and introducing customized credit cards for micro-enterprises will inject much-needed capital liquidity into the MSME sector, allowing businesses to invest in growth and innovation. Further, set up of Bharat Trade Net portal will digitalise the documentation flow of cross border business and enhance possibility of cross border finance for MSME exporters in big way on ITFS (International Trade Finance System) platform.
The next level initiative by government to decriminalise 100 more provisions under various Acts will give confidence to businesses to invest more and experience the ease of doing business. Additionally, the Manufacturing Mission’s emphasis on workforce development, and technology adoption will further strengthen India’s position as a global manufacturing powerhouse. Especially, with global companies increasingly looking to India as a preferred business destination, these measures will not only improve MSME productivity and competitiveness but also accelerate the ‘Make in India’ vision, helping position India as a dominant player in the global supply chain."
The government's emphasis on strengthening MSMEs in this year’s budget is evident. Increasing the credit guarantee cover from ₹5 crore to ₹10 crore is a crucial step that will unlock ₹1.5 lakh crore in additional credit over the next five years. Additionally, a term loan of up to ₹20 crore will be provided to well-run export-oriented MSMEs, further supporting their expansion. With MSMEs employing 7.5 crore individuals and contributing 36% to manufacturing, these measures will bolster their growth, enhance financial access, and reinforce India’s position as a global manufacturing hub.
"The Union Budget 2025 strongly emphasises exports as a key pillar of economic growth, bringing much-needed support to MSME exporters who contribute nearly 45% of India's total exports. The enhancement of investment and turnover limits for MSME classification and the significant expansion of credit guarantee cover for well-performing exporter MSMEs will enable businesses to scale efficiently and access capital more easily.
Establishing the Export Promotion Mission and BharatTradeNet (BTN) as a unified digital public infrastructure for trade documentation and financing solutions is a welcome step. By streamlining access to export credit and cross-border factoring, these initiatives will improve liquidity and reduce operational bottlenecks for exporters. Additionally, aligning BTN with international trade practices will enhance India's ease of doing business and strengthen our position in global markets.
Reducing customs duties on key seafood industry inputs will further boost the competitiveness of Indian seafood exports, helping businesses expand their global footprint. With these policy measures, the government has reaffirmed its commitment to making India a leading player in global trade while empowering MSMEs with the right financial and digital infrastructure to compete internationally."
"The Union Budget 2025 takes a progressive approach by recognizing exports as a key pillar of economic growth. The establishment of the Export Promotion Mission and Bharat Trade Net as a unified digital public infrastructure will significantly enhance trade facilitation, and help MSMEs build a strong digital trail, enhancing the trust of financial institutions in their businesses. With digital documentation, transparency in trade transactions will improve, leading to greater credit infusion and improving access to export credit and cross-border factoring support for a better financial inclusion for MSMEs.
We believe that the emphasis on easing financial bottlenecks for exporters, particularly MSMEs, will be beneficial in long term. Further addressing non-tariff barriers will strengthen India's global trade competitiveness. With simplified access to trade finance and seamless digital documentation will be instrumental in driving efficiency, liquidity, and ease of doing business in international markets. These measures mark a crucial step toward positioning India as a stronger player in global trade."
"The Union Budget 2024-25 has made notable progress in addressing the needs of MSMEs, aligning with several key expectations. The enhancement of investment and turnover limits for MSME classification by 2.5 and 2 times, respectively, is a forward-looking step that will encourage scalability and job creation, particularly for the youth. This move is likely to instill confidence in MSMEs to expand their operations and contribute more significantly to employment generation.
The substantial increase in credit guarantee cover—up to ₹10 crore for Micro and Small Enterprises and ₹20 crore for Startups—addresses the persistent challenge of access to capital. The introduction of customized Credit Cards for micro-enterprises is another positive step, simplifying funding and fostering operational efficiency. Additionally, the budget’s emphasis on inclusivity, through schemes offering term loans up to ₹2 crore for women, SCs, and STs first-time entrepreneurs, alongside online capacity-building programs, is commendable. The recognition of gig workers through identity cards and healthcare benefits under PM Jan Arogya Yojana further supports the new-age services economy.
However, the budget falls short in certain areas. A more focused approach to leveraging AI in business and fintech partnerships could have significantly improved access to credit for MSMEs. While initiatives like transforming India Post into a public logistics organization and leveraging rural post offices for economic growth indirectly promote digitization, a direct push for AI-driven solutions would have been more impactful. Additionally, explicit tax reforms to ease compliance burdens on MSMEs remain unaddressed, which could have further strengthened the sector.
Overall, the budget lays a solid foundation for MSME growth, with a focus on credit availability, scalability, and inclusivity. While it misses opportunities to address AI integration and tax reforms, the measures announced are poised to empower MSMEs to drive economic recovery, job creation, and India’s vision of becoming a global manufacturing hub. The success of these initiatives will depend on effective implementation and continued focus on addressing gaps in the future."
“Progcap welcomes the Union Budget 2025, which strengthens the foundation for MSME growth by addressing long-standing challenges in access to credit, scalability, and global competitiveness.
A major highlight of this budget is the enhanced Priority Sector Lending (PSL) classification, with investment limits increased by 2.5 times and turnover limits doubled. This change expands the pool of MSMEs eligible for PSL-linked credit, incentivizing financial institutions to direct more funding into the sector. With more MSMEs qualifying for PSL benefits, businesses will have better access to affordable capital, reducing their reliance on high-cost borrowing and fostering long-term growth.
For years, one of the biggest hurdles for MSMEs has been securing timely and adequate credit. The expansion of the credit guarantee cover for micro enterprises from ₹5 crore to ₹10 crore is a critical move, unlocking ₹1.5 lakh crore in additional lending over the next five years. This gives financial institutions greater confidence to extend credit to underserved businesses, enabling them to access working capital without collateral.
The introduction of customised credit cards with a ₹5 lakh limit for micro enterprises registered on the Udyam Portal is another step toward financial flexibility. Many small businesses operate with irregular cash flows, and these cards will give them a structured, accessible way to manage short-term expenses. This allows credit distribution at the last mile to an even wider segment of the market.
The budget also introduces a new scheme offering term loans of up to ₹2 crore for first-time women, Scheduled Castes (SC), and Scheduled Tribes (ST) entrepreneurs. Historically, these groups have encountered barriers such as limited access to capital and inadequate managerial support, hindering entrepreneurial pursuits. This initiative not only provides financial assistance but also includes online capacity building for entrepreneurship and managerial skills, empowering marginalized groups to establish and grow their businesses.
With MSMEs contributing 45% to India’s exports, the newly announced export promotion mission will help businesses navigate non-tariff barriers and expand globally. As MSMEs scale up to meet global demand, they will need stronger financial, technical, and skilling support.
We believe these budgetary measures will catalyse the next wave of MSME growth, fostering a more inclusive and resilient financial ecosystem. Progcap looks forward to working with MSMEs to leverage these opportunities, ensuring they have the credit, flexibility, and support needed to grow, innovate, and thrive.”
We’d love to hear your thoughts! How do you think the Union Budget 2025-26 will impact the real estate sector? Do you see it addressing key industry challenges, or are there areas that still need attention? Share your opinions in the comments below!
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