As India gears up for the Union Budget 2025, Micro, Small, and Medium Enterprises (MSMEs) are keenly watching for policy measures that will drive economic growth, enhance ease of doing business, and provide targeted support to key sectors. With MSMEs contributing nearly 30% to India’s GDP and employing over 110 million people, their expectations from the upcoming budget span across infrastructure, finance, technology, and sustainability.
Boosting Infrastructure and Manufacturing
Infrastructure development remains a crucial area of focus for MSMEs. The manufacturing sector, particularly industries related to construction and urban development, is set to benefit from targeted government investments.
Mr. Mahesh Viswanathan, Deputy CEO and CFO, Finolex Cables Ltd., shared his insights on the industry’s expectations:
“As we approach the Union Budget 2025, we at Finolex Cables look forward to policies that bolster India’s infrastructure and manufacturing sectors, which are key growth drivers for our industry. With the construction sector contributing significantly to the demand for electrical wires and cables, targeted investments in affordable housing and urban development will have a cascading impact on the industry’s growth.
We also anticipate incentives for emerging technologies such as renewable energy, electric vehicles, and 5G rollout. These segments will not only boost demand for specialized products like solar and automotive cables but also accelerate the deployment of optic fiber networks, addressing India’s underpenetration in digital infrastructure.”*
Driving MSME Competitiveness and Innovation
Given the rising cost of raw materials, MSMEs expect relief measures such as reduced import duties and streamlined taxation policies. A stable input pricing mechanism is essential to maintain the competitiveness of domestic manufacturers.
Mahesh Viswanathan further emphasized:
“Given rising raw material costs, we hope for measures to ease import duties and stabilize input pricing, ensuring the competitiveness of domestic manufacturers. Furthermore, a supportive capex framework will enable companies to enhance production capabilities, especially in high-growth areas like solar energy and automotive sectors.”
EV Sector: Scaling Up Clean Mobility
The electric vehicle (EV) sector has witnessed significant growth, and MSMEs in EV logistics and component manufacturing anticipate favorable budgetary measures.
Mr. Maxson Lewis, Founder and CEO of Magenta Mobility, highlighted the importance of government support for EV adoption:
“The Union Budget 2025 is a pivotal moment for the EV logistics sector, which plays a crucial role in India’s transition to sustainable transportation. Targeted incentives for commercial fleet electrification, reduced financing costs for EV logistics operators, and a more structured GST framework for EV components can significantly accelerate adoption.
Additionally, policy support for localized battery recycling and supply chain development will strengthen India’s self-reliance in the EV ecosystem. With the right measures, the Budget can drive large-scale EV adoption in logistics, making clean mobility more accessible, efficient, and economically viable.”
Solar Energy: Strengthening Clean Energy Adoption
The Indian government has been actively promoting solar energy, and MSMEs in the sector seek continued financial support to drive adoption.
Ms. Preeti Bajaj, MD & CEO, Luminous Power Technologies, shared her thoughts on the role of the Budget in accelerating solar energy adoption:
“The Union Budget 2025 presents a pivotal opportunity to accelerate India’s transition to solar energy. As the demand for clean energy rises, we expect the government to introduce enhanced financing schemes, such as subsidies, low-interest loans, and tax incentives, to make solar installations more affordable for households and businesses. Expanding initiatives like the Pradhan Mantri Suryoday Yojana will further drive solar adoption and create new employment opportunities.
Additionally, supporting MSMEs with tax breaks, grants, and funding for R&D will foster innovation and reduce costs in the solar sector. Finally, investing in skill development programs for women and youth will help bridge the gender gap and create a skilled workforce to meet the demands of India’s growing solar market.”
Financial Support and Credit Accessibility for MSMEs
Access to affordable credit and a robust digital ecosystem are critical for MSME growth. The financial sector anticipates measures that will enhance disposable income, improve credit accessibility, and strengthen the banking infrastructure.
Rajiv Sabharwal, MD & CEO of Tata Capital, commented on the financial expectations from the Budget:
“As we approach the Union Budget 2025, there is a significant opportunity for the government to boost consumption in the economy by increasing disposable income in the hands of people. Moreover, offering tax rebates on retail savings accounts and bank deposits will aid in improving the ability of banks to mobilize deposits and thereby boost the entire credit ecosystem.
An increase in the tax deduction limit for housing loan interest will stimulate loan uptake and encourage the housing sector. Also, housing loan limits under priority sector lending should be increased considerably from the present levels to reflect the current market realities.
Furthermore, prioritizing the creation of a robust digital ecosystem for MSMEs will be crucial in ensuring seamless credit access, promoting growth, and strengthening the backbone of our economy. Additionally, lowering the SARFAESI threshold from ₹20 lakh to ₹1 lakh will help NBFCs for faster resolution of stressed accounts and bring them at par with HFCs, Banks, and other financial institutions.”
The Potential of Budget 2025
The Union Budget 2025 has the potential to act as a catalyst for MSME growth, driving innovation, sustainability, and financial stability. By focusing on infrastructure development, clean energy transition, EV adoption, and financial accessibility, the government can empower MSMEs to become the backbone of India’s economic resurgence. The industry stakeholders eagerly await policy interventions that will address their pressing concerns and set the stage for long-term economic prosperity.