Gain perspectives on India's journey toward a progressive and inclusive economic future.
#GTonBudget | Our leaders share their insights on Union Budget 2025-26 announcements
Tax
Individuals without exemptions or deductions will benefit the most as the slabs have been rationalised. This shows the government’s intent to make the new tax regime more beneficial and promote more individuals to opt for it.
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
Skill Development
“Dhan-Dhaanya Krishi Yojana,? is a positive step towards addressing low productivity while also supporting income enhancement for farmers in these areas. It will also promote processing capacity, benefiting nano and micro-enterprises in rural regions.”
Ashok Varma , Partner and Education & Skill Development Expert.
Tax
The government's proposed retrospective amendment to the CGST law concerning 'plant or machinery' effectively overrides the Supreme Court's ruling in the landmark Safari Retreats case, where the Court had permitted businesses to claim ITC on properties classified as 'plant' under the functionality test. From taxpayers' perspective, this amendment has far-reaching implications as industries that have structured their ITC claims based on the Safari Retreats ruling or the prevailing interpretation of existing provisions now need to urgently reassess their tax positions.
Krishan Arora , Partner and India Investment Advisory Services Leader, Grant Thornton Bharat
FMCG
The Union Budget 2025 provides a strong fiscal foundation for the FMCG industry, marked by key measures aimed at boosting consumer demand and improving spending power. Moreover, increase in disposable income from tax relief, combined with moderating inflation, will help restore confidence and drive demand in FMCG segments, especially in urban markets which have witnessed a decline for the past few months.
Naveen Malpani , Partner and Consumer Industry Leader, Grant Thornton Bharat
MSMEs
"Enhanced Credit Guarantee Scheme: The credit guarantee cover for micro and small enterprises will be significantly improved. The guaranteed limit will increase from ?5 crore to ?10 crore, unlocking an additional ?1.5 lakh crore in credit over the next five years. This initiative aims to facilitate easier access to credit for MSMEs, thereby supporting their growth and expansion."
Prof. V. Padmanand , Partner and Agriculture Industry Leader
Financial Services
The Investment Friendliness Index will promote pro-business policies, enhancing investor confidence and capital inflows.
Vivek Ramji Iyer , Partner and Financial Services Risk Leader, Grant Thornton Bharat
Financial Services
"The focus on the four engines of growth—agriculture, MSMEs, investments, and exports—will create rising credit needs that must be met by a broader and more robust financial system. This opens the door for the issuance of more universal bank licenses and the granting of Small Finance Bank licenses to urban and rural co-operative banks."
Vivek Ramji Iyer, Partner and Financial Services Risk Leader
Automotive and EV
“The Budget’s customs duty cuts on lithium-ion batteries, alongside the National Critical Mineral Mission, mark a key step in strengthening India’s EV ecosystem. Lower import costs will make EVs more affordable, while investments in domestic mineral exploration, battery manufacturing, and electrolyte production will drive long-term self-reliance. By fostering innovation, local manufacturing, and resource security, India is positioning itself as a global hub for sustainable transport, ensuring a competitive, resilient EV industry aligned with its Net Zero goals."
Saket Mehra, Partner and Auto & EV Industry Leader
Telecom
The Budget's emphasis on electronics manufacturing under the 'Make in India' initiative is a positive step. The exemption of open cells for LED/LCD TVs and capital goods for lithium-ion battery production will enhance domestic production capabilities and reduce reliance on imports. Additionally, the reduction of Basic Customs Duty (BCD) on Carrier Grade Ethernet switches from 20% to 10% is expected to lower costs, streamline classification, and ultimately benefit India's telecom infrastructure development.
Sohrab Bararia , Partner, Tax Planning & Optimisation, Grant Thornton Bharat
FMCG and Consumer Goods
“Indian Toy market is highly fragmented with nearly 90% production being conducted by MSME. With a focus on of making India a toy hub and a focus on MSME growth will give a massive boost to the Toy Industry and will further enhance acceptability of Indian toys in the global market. India’s toy exports slipped slightly to USD 152.34 million in FY24, highlighting the need for a more robust strategy to boost global competitiveness.”
"The government’s five-year mission to enhance cotton productivity with high-quality, long-staple varieties is a game-changer for India’s textile industry. By boosting domestic productivity, this initiative will stabilise raw material availability, reduce import dependence, and enhance the global competitiveness of India’s textile sector, where 80% of capacity is driven by MSMEs."
Naveen Malpani, Partner and Consumer Industry Leader
Healthcare
"Broadband connectivity will be extended to all Primary Healthcare Centres. According to the Economic Survey Report 2024-25, 5G services are now available in 779 out of 783 districts. This will support telemedicine (e-Sanjeevini) and enable technology and AI-driven medical solutions across India, contributing to the achievement of Universal Health Coverage."
Bhanu Prakash Kalmath S J Partner and Healthcare Industry Leader
GCCs
"The Budget’s focus on expanding talent availability and infrastructure in Tier-II cities marks a significant step in strengthening India’s GCC ecosystem. By unlocking access to a wider talent pool, including professionals who prefer to stay in their hometowns, this initiative will enhance workforce stability and retention. As GCCs evolve into strategic hubs for innovation and technology, this expansion will drive inclusive growth, reduce regional disparities, and position India as a global leader in digital and business services. A well-distributed GCC network will ensure long-term resilience, scalability, and global competitiveness."
Jaspreet Singh , Partner and GCC Industry Leader
#GTonBudget | Our leaders share their pre-Budget insights.
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
“The forthcoming budget in India is anticipated to unveil the new Direct Tax Code 2025, a development that has generated considerable interest and discussion. Some of the key changes likely to be introduced in the direct tax code includes—Streamlining tax filing by reducing the number of sections and incorporating more schedules, simplifying taxpayer classification to residents and non-residents, eliminating categories such as ROR and RNOR., eliminating most deductions and exemptions to close loopholes and ensure a fairer tax system, expanding the scope of Tax Deducted and Collected at Source (TDS/TCS) to cover almost all income types, promoting regular tax payments and reducing evasion, taxing capital gains as regular income, which may result in higher taxes for some but ensures equal treatment of all income types, abolishing the concepts of “Assessment Year” and “Previous Year”, using only the “Financial Year” for tax filing, renaming income categories for clarity, with “Income from Salary” becoming “Employment Income” and “Income from Other Sources” becoming “Income from Residuary Sources.”
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"India’s tax revenues continue on an upward trajectory, with Personal Income Tax collections rising 16.12% YoY, achieving 90.88% of FY25 targets. Corporate Tax stands strong at 95.28%, while STT has outperformed at 120.37%. With an overall revenue gap of INR 1.42 lakh crore, the focus remains on sustaining this momentum. India’s tax revenue trends reflect a dynamic and resilient economy, supported by rising incomes, strong corporate earnings, and vibrant market activity. The challenge now is to maintain growth amid global uncertainties. Fiscal stability remains essential, and policy focus will be key in balancing expansion with long-term economic resilience."
Ashish Chhawchharia , Partner and Aviation Industry Leader, Grant Thornton Bharat
“The current climate in Indian aviation is markedly pointed towards sustainability and increased connectivity. Last year saw the consolidation of Air India into an ambitiously placed airline, accompanied by Indigo’s expanding fleet and transformation in business model. In lieu of this, the industry expects this year’s budget to allocate funding towards the UDAN scheme, operationalising more greenfield airports, and sustainable fuel technology.”
Bhanu Prakash Kalmath S J , Partner and Healthcare Services Industry Leader, Grant Thornton Bharat
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“Increasing healthcare spending to 2.5% of GDP is essential to strengthen infrastructure and expand access, particularly in underserved areas. This investment will enable the establishment and upgrade of facilities while advancing preventive care initiatives like immunisation drives and health awareness programs to address health challenges at their root.”
Bhanu Prakash Kalmath S J, Partner and Healthcare Services Industry Leader, Grant Thornton Bharat
“Enhanced PLI support for the biotechnology sector will further accelerate growth in this sub-segment. In 2023-24, imports accounted for 60-65% of the country’s total API requirements, with a significant share sourced from China. Expanding the scope of the PLI scheme and extending incentives for greenfield projects can play a pivotal role in attracting investments and boosting manufacturing capacity in this critical sector.”
Bhanu Prakash Kalmath S J, Partner and Healthcare Services Industry Leader, Grant Thornton Bharat
"The rising demand for the establishment of modern facilities through public-private partnerships and hospital expansions should be taken care of. This investment will enhance primary healthcare centres with skilled personnel and diagnostics, advance preventive care, and integrate digital health technologies like telemedicine to revolutionise accessibility. There is a need to increase Budget allocation to building infrastructure. Portable water will also improve the quality of life and bring down communicable disease burden."
Jaspreet Singh , Partner and Cyber Advisory Leader Grant Thornton Bharat
"India’s Global Capability Centres (GCCs) are evolving from support hubs to engines of global innovation and transformation - even leading global hubs for lot of large corporates. By driving cutting-edge research in AI, semiconductors, Pharma, and aerospace, - almost all industries are strengthening India’s role in the global ecosystem. With a deep STEM talent pool and expanding leadership roles, GCCs are not only shaping the future of industries but also creating high-value jobs and fostering technological self-reliance. Their continued growth will accelerate digital transformation, enhance global competitiveness, and position India as a key player in next-generation innovation. As businesses centralise strategic functions here or even move the entire piece to India, India’s GCCs will play a critical role in defining the future of global enterprises."
Narendra Ganpule, Partner and FS Consulting and Insurance Industry Leader, Grant Thornton Bharat
“As the Government is aspiring to have “Insurance for all by 2047”, GST relief on protection products namely term life and health insurance will make the products more affordable for the end consumer thereby helping to increase penetration.”
Riaz Thingna , Partner, Tax, Grant Thornton Bharat
“The revenue secretary, in a post-budget (2024) interaction, clarified that there is no intention to create a new direct tax code; only a comprehensive review of the existing Income-tax Act is contemplated. In a follow-up action, 22 specialised sub-committees have been constituted and the mandated task for these committees is to ensure the removal of redundant provisions and simplification of the Act, aimed at reducing litigation and compliances, widening the tax base, following global best practices. The government has also solicited inputs and suggestions from various stakeholders in October (2024) and 6,500 suggestions were received in a months' time.”
Riaz Thingna , Partner, Tax, Grant Thornton Bharat
“The government's focus should be on addressing specific issues like buyback taxation and providing incentives for emerging sectors such as startups, renewable energy, and artificial intelligence. Government's focus should be on addressing specific issues like buyback taxation and providing incentives for emerging sectors such as startups, renewable energy, and artificial intelligence.”
Rishi Shah , Partner and Economic Advisory Services Leader, Grant Thornton Bharat
"The Economic Survey projects a GDP growth of 6.3%-6.8% for FY25, which presents a realistic outlook amidst global and domestic headwinds. Larger corporates remain uncertain about taking on additional investments, and political decisions—especially in the US—will influence capital flows. The intensification of global conflicts, such as the Russia-Ukraine and Israel wars, adds further uncertainty. However, a pick-up in consumption expenditure and investment could help drive growth. The government's focus on deregulation is a positive step in creating an investor-friendly environment, which may provide much-needed support."
Shabala Shinde , Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat
“With SEBI introducing regulations for small and medium REITs, one would expect more traction in this space. It would therefore be relevant to enhance investor confidence by introducing capital gains exemptions for direct asset transfers and security swaps, aligning withholding tax rates for FPIs, and granting dividend tax exemptions to unitholders.”
Vivek Ramji Iyer , Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat
“With the rupee depreciating and geopolitical challenges accentuating supply-side risks, inflation will remain a challenge. Fiscal policy must take the lead in stimulating growth without blowing the fiscal deficit out of control. Policies need to focus on achieving GDP growth north of 8.5% while incentivising private sector investments through public-private partnerships in areas like infrastructure, MSMEs, R&D, climate, ESG, and agriculture. Incentives such as subsidies, credit guarantees, refinancing, and tax breaks could be explored. Foreign capital will also be critical for addressing currency volatility and building FX reserves.”
Vivek Ramji Iyer, Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat
“With the rupee depreciating and geopolitical challenges accentuating supply-side risks, inflation will remain a challenge. Fiscal policy must take the lead in stimulating growth without blowing the fiscal deficit out of control. Policies need to focus on achieving GDP growth north of 8.5% while incentivising private sector investments through public-private partnerships in areas like infrastructure, MSMEs, R&D, climate, ESG, and agriculture. Incentives such as subsidies, credit guarantees, refinancing, and tax breaks could be explored. Foreign capital will also be critical for addressing currency volatility and building FX reserves.”
Vivek Ramji Iyer, Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat
“Regulatory framework relaxations could be around three aspects: rationalisation regulatory reporting requirements; move to off site surveillance from on site inspections and; and a move to a more principle based regulation with industry self regulatory organisations playing a larger role in detailing out the operational aspects.”
Vivek Ramji Iyer, Partner and National Leader, Financial Services - Risk, Grant Thornton Bharat
“Regulatory framework relaxations could be around three aspects: rationalisation regulatory reporting requirements; move to off site surveillance from on site inspections and; and a move to a more principle based regulation with industry self regulatory organisations playing a larger role in detailing out the operational aspects.”
Rishi Shah, Partner and Economic Advisory Leader, Grant Thornton Bharat
“The coming Budget is likely to build on the announcements made last year and emphasise creation of hard and soft infrastructure, while addressing some concerns on the cost of doing business. Strategic investments in infrastructure and targeted reforms to reduce business costs could enable the government to build a strong foundation for sustainable and inclusive growth. The Budget is likely to propose significant capital expenditure in areas such as transportation, energy, and digital connectivity, alongside bolstering soft infrastructure, including education, healthcare, and skill development. Addressing the cost of doing business remains a critical concern. It is anticipated that the Budget will introduce measures aimed at streamlining regulatory frameworks, simplifying tax structures and providing incentives for small and medium-sized enterprises (SMEs). These are essential for fostering entrepreneurship, encouraging innovation, and enhancing the overall competitiveness of the Indian economy.”
Manoj Bansal , Partner, Climate Change & Energy, Grant Thornton Bharat
“India’s 2025 Budget is expected to focus strongly on climate action. The Government aims to meet its climate goals while supporting development. Increased funding for climate resilience and green infrastructure is likely.”
Sachin Sharma , Partner, Tax, Grant Thornton Bharat
“With the 2025 Union Budget coming up, India has an unparalleled opportunity to secure its position as a preferred manufacturing hub. India’s manufacturing sector has emerged as a vital pillar of the economy, driven by initiatives like the Production Linked Incentive (PLI) scheme, which has catalysed over $17 billion in investments across sectors, including electronics, automotive, and pharmaceuticals. This initiative has generated INR 11 trillion worth of production and created more than 1 million jobs, reflecting its transformative impact.”
Prof. V. Padmanand , Partner and Agriculture Industry Leader, Grant Thornton Bharat
"India's overall macroeconomic stability is evident from its comfortable forex reserves of over USD 640.3 billion, covering over 8 months of import bills, a realised GDP growth of 6.4%, a manageable current account deficit of 1% of GDP, and inflationary trends within the range of 5%. The government's strategy is particularly noteworthy, with a focus on MSME importance as the middle ground, deregulation for MSMEs at the grassroots, and flexibility in labour working norms. Additionally, the emphasis on education and R&D, flexibility for educational institutions in course structuring, and encouragement of industry-government-academia interfaces are all pragmatic steps. Furthermore, initiatives in agriculture, such as land pooling to encourage collective and corporate farming, akin to the Kerala Navodhan model, and targeting micro-irrigation, address critical issues like marginal landholdings. Overall, these measures demonstrate a very apt and practical thinking approach."
Prof. V. Padmanand , Partner and Agriculture Industry Leader, Grant Thornton Bharat
“The outlays for MSME programs, amounting to less than INR 10,000 crore, are disproportionately low compared to allocations for agriculture. There is a need to enhance outlays under the listed programmes such as micro & small enterprises cluster development programme (MSE-CDP) and raising and accelerating MSME performance (RAMP) programme.”
Ramendra Verma , Partner and Government Consulting Leader, Grant Thornton Bharat
"Given the limited allocation, we are still far away from seeing approval for Silicon fabs. Enhance financial incentives such as extending the PLI scheme, focus on R&D by allocating dedicated funds and invest in skilling and training programmes as well as infrastructure development. Develop critical semiconductor infrastructure such as fabrication plants (fabs), assembly, testing, marking, and packaging facilities, and outsourced semiconductor assembly and test units."
Raja Lahiri , Partner and Technology Industry Leader, Grant Thornton Bharat
“The extension of SEZ tax holidays and the reinstatement of key export incentives will collectively support the growth and global competitiveness of India's IT and tech/AI industries.”
Rishi Shah , Partner and Economic Advisory Leader, Grant Thornton Bharat
“One of the reasons for Indian companies investing abroad seems to be for strategic purposes. A control on ports and shipping lines has enabled them to cut down shipping times substantially.”
Vineet Bhatia , Executive Director, Renewable and New Energy, Grant Thornton Bharat
"India’s ambitious goal of achieving 500 GW of renewable energy capacity by 2030 demands bold policy initiatives, substantial investments, and focused incentives. The upcoming Budget should prioritise PLI schemes for OEMs, duty reductions on critical materials, uniform 5% GST for wind and solar, extended tax concessions for renewables, streamlined customs duties for BESS, and clarity on voluntary certificates. Strengthening local manufacturing and fostering offshore wind markets will be key to reducing costs and accelerating India’s transition to a sustainable energy future.”
Pradeep Singhvi , Executive Director, Energy and Climate Practice, Grant Thornton Bharat
“Doubling global energy efficiency improvement rates from 2% to 4% annually by 2030 is crucial to achieving net zero goals by 2050. For India, this requires surpassing Business-as-Usual energy efficiency levels by over 2.1% while addressing climate change complexities through measures such as accelerating CCUS adoption approach, fostering private investments in green projects, establishing a green taxonomy, promoting energy-efficient technologies, and leveraging climate finance solutions. With commitments to reduce emissions intensity by 45% by 2030 and achieve net zero by 2070, the Union Budget must prioritise scalable energy efficiency and low carbon initiatives across industries, MSMEs, buildings, municipalities, and agriculture.”
Praveen Kashyap , Executive Director, Tax, Grant Thornton Bharat
The Government is likely to introduce key amendments in SEZ policy to simplify the existing SEZ framework. Key amendments that could be proposed in revised framework may include concept of duty foregone, redefining the scope of services, establishing a uniform regulatory framework. These changes will aim to foster inclusive economic growth, attract investment, and enhance India's global competitiveness.