Simplifying compliance, boost to MSMEs key to Budget announcements, say experts

Budget 2025 aimed to spur entrepreneurial growth and create jobs through various announcements. The credit guarantee limit for MSMEs was doubled from Rs 5 crore to Rs 10 crore enabling more collateral free formalized funding. The FM also increased the turnover and investment threshold for MSME classification by 2 and 2.5 times to increase coverage of benefits to more businesses.

While businesses are largely positive in their view, experts agree implementation will remain the key.

Gopal Srinivasan, Chairman & Managing Director of TVS Capital Funds
For startups and investors, this Budget builds on the July 2024 tax reforms, including LTCG alignment and Angel Tax removal, by providing greater regulatory clarity, deeper capital pools, and stronger business enablers. The capital gains treatment of Category I and II AIF investments is now legally codified, removing ambiguity and ensuring stability. A revamped Central KYC Registry will reduce onboarding time across financial institutions, while the incorporation deadline for tax benefits has been extended by five years, covering startups founded before April 1, 2030. Raising the FDI limit from 74% to 100% will unlock capital and accelerate the government’s ‘Insurance for All’ mission.

Expanding capital access and innovation remains a key focus. The Rs 10,000 crore Fund of Funds for Startups strengthens the Rs 90,000 crore capital pool created since 2016, ensuring a fresh infusion that will accelerate domestic capital flow for growth-stage startups. A new entrepreneurial scheme for SCs, STs, and first-time founders, inspired by Stand-Up India, will further expand grassroots entrepreneurship.

Rajat Tandon, President, IVCA
The Finance Minister’s decision to explicitly define securities held by investment funds as capital assets is a landmark step for the Indian alternate capital industry. This long-awaited reform brings much-needed tax certainty, minimizing disputes and aligning India’s regulatory framework with global best practices. The clarity in tax treatment will provide a strong boost to investor confidence, paving the way for increased domestic and international capital flows into high-growth sectors.
The government’s continued focus on fostering innovation—through an expanded Fund of Funds and the proposed Deep Tech Fund—is equally commendable. These initiatives will ensure that emerging businesses, particularly in frontier technologies, have access to critical growth capital, further cementing India’s position as a global startup hub.


Sundeep Mohindru, Founder and Promoter, M1xchange
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.

Nikhil Kurhe, Co-founder & CEO at Finarkein Analytics
The introduction of the Rs 5 lakh credit card for micro-enterprises and enhanced credit guarantee cover for MSMEs signals a strong push toward financial inclusion. With increased access to capital, fintech infrastructure providers have a unique opportunity to build smarter underwriting models and data-driven lending platforms that can drive responsible credit growth.
The expansion of credit guarantee schemes and collateral-free loans for MSMEs is a welcome step. However, to truly scale lending in this sector, we need greater interoperability across financial ecosystems. Open Finance infrastructure can bridge this gap by enabling real-time credit assessment using alternative data sources.

Pearl Agarwal, Founder and Managing Partner, Eximius Ventures
The Indian PE-VC ecosystem is still evolving and in nascent years. We can only boast a history of two decades as opposed to developed nations nurturing the industry for over 50 years. Today, only 13% of Indian domestic family office capital is in alternative assets as opposed to 50% in the US. Hence, while foreign capital and family offices warm up to the opportunities that the country has to offer, it is important that the government takes required steps to boost the startup ecosystem with institutional capital. It’s gladdening to see the recent budget take a huge leap in that direction.

Sasikumar Gendham, President of ELCINA
The Budget has significantly enhanced funding for semiconductors and AI, rationalizing tariffs, and incentivizing local production by reducing tariffs on inputs and enhancing allocation for PLI Schemes. The allocation of ₹7,000 crore for semiconductor and display manufacturing is a gamechanger. It marks an 83% increase, underlining the government’s resolve to reduce India’s dependence on foreign-made chips and increase domestic manufacturing capacity. The 56% higher allocation of Rs 9000 Cr to PLI Schemes augurs well for large-scale electronics and IT hardware manufacturing. However, ELCINA recommends that to achieve real self-reliance and ‘atmanirbharta’ we need to focus on electronic components and there inputs on which our import dependence remains very high.

Pankaj Chadha, Chairman, EEPC India
The Budget 2025-26 is bold, inclusive and growth-oriented. For the engineering exports sector, the introduction of the Export Promotion Mission and BharatTradeNet will reduce compliance burdens and improve logistics efficiency, benefiting exporters. Support for MSMEs, credit guarantee expansion, and customs duty reforms on critical materials, including EV production, are also positive steps that will lower input costs and enhance cost competitiveness. However, some concerns remain particularly the absence of an update on the Interest Equalisation Scheme, which continues to hinder export credit affordability. The lack of targeted financial support for export promotion activities and ongoing challenges with high logistics costs and non-tariff barriers in key markets need to be addressed.


Shantanu Bairagi, CEO - Veefin Capital
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.


Rakesh Mehra, Chairman, Confederation of Indian Textile Industry (CITI)
Announcing the Mission for Cotton Productivity which will facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra long staple cotton varieties. Various other Government initiatives like the revision of tariff items on knitted fabric categories to boost domestic industry, exemption of 2 more shuttle less looms from BCD to support technical textile industry, setting up of Export Promotion Mission, etc. will accelerate the sector’s growth. The enhanced credit availability with guaranteed cover for MSMEs will definitely boost the confidence of MSMEs, however, the textile industry has been requesting a mix of an upfront capital subsidy and performance-based incentive scheme, especially for the MSME and such a scheme is needed for the targeted growth in this sector.

Munindra Verma, CEO, M1 NXT
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.

Pushkar Mukewar, Co-Founder and CEO, Drip Capital
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.

Ashish Kukreja, Founder and CEO, Homesfy and mymagnet.io
The allocation of the Union Budget 2025 reveals an ambitious step to transform Indian real estate and empower homebuyers. The nation is on a positive growth trajectory due to the Union Government's emphasis on MSMEs, infrastructure, and tax changes. This Rs 1.5 lakh crore interest-free 50-year loan to states for their capital expenditures and the creation of a Rs 1 lakh crore urban challenge fund are masterstrokes. Such infrastructure development activities will spur urbanisation, enhance connectivity, and transform cities into growth hubs while improving the liveability score.

Samudragupta Talukdar, Founder and CEO, Relata
Budget 2025 shows remarkable foresight in addressing both immediate housing concerns and future market dynamics. The expansion of SWAMIH with a Rs 15,000 crore fund speaks directly to thousands of middle-class families who've been caught in the challenging cycle of paying EMIs while living on rent. But what's truly encouraging is how this budget looks at the bigger picture – from boosting home loan affordability through tax exemptions to embracing digital transformation in real estate.

Vikalp Sahni, Founder & CEO at Eka Care
The recent budget's focus on easing the tax burden for the middle class is a welcome move. More disposable income often translates to increased spending on discretionary items. With increased disposable income, we have a unique opportunity to shift the focus from reactive to preventative healthcare. People are more likely to invest in their long-term well-being when they have greater financial flexibility.

Soumitra Gupta, Founder & CEO of Aforeserve
The Union Budget 2025-26 shows a clear focus on supporting MSMEs and strengthening the manufacturing sector, which is key to India’s economic growth. The revision of MSME classification criteria and the increase in credit guarantee cover will make it easier for businesses to access funds, helping them expand and create jobs. The introduction of customized credit cards for micro-enterprises and the new scheme for first-time entrepreneurs will encourage small businesses, especially those led by women and marginalized communities.

Karan Bhargava Founder and CEO of Homoeo Amigo
In the Union Budget 2025, Finance Minister Nirmala Sitharaman emphasized the government's commitment to enhancing healthcare infrastructure and services across India. Over the past decade, there has been a 130% increase in medical seats, with nearly 1.1 lakh undergraduate and postgraduate positions added. Building on this progress, the government plans to introduce 10,000 additional seats in medical colleges and hospitals in the coming year, as part of a broader initiative to add 75,000 seats over the next five years. This expansion aims to address the growing demand for medical professionals and improve access to quality healthcare nationwide.

Sachin Jain, Managing Partner, Scripbox
The Union Budget 2025-26 reflects the government's commitment to fiscal discipline, setting the fiscal deficit target at 4.4% of GDP, down from 4.8% this year. This prudent approach is anticipated to alleviate pressure on interest rates and help control inflation, benefiting a broad segment of the population. Significant investments in infrastructure, particularly in the power sector, underscore the government's dedication to development. The emphasis on Public-Private Partnerships (PPP) and incentives for key sectors are expected to stimulate employment opportunities.

Rural consumption receives a substantial boost through comprehensive measures, including the adoption of 100 villages and increased investment in essential food items like pulses, vegetables, fruits, and fisheries.

Vaibhav Kaushik, Co - founder & CEO, Nawgati
The 2025 Budget signals the government's dedication to nurturing India's startup ecosystem. With the increase in credit guarantee cover for startups from Rs 10 crore to Rs 20 crore and the reduced guarantee fee for loans in key sectors, the budget provides a solid foundation for businesses to access the funding they need. The introduction of the Rs 10,000 crore Fund of Funds is also a critical step in empowering startups, ensuring they have the capital to innovate, scale, and make their mark in the market.

The government’s focus on supporting clean tech manufacturing, along with the exemption of customs duty on lithium-ion battery production, shows a commitment to cleaner energy solutions.

Nemesisa Ujjain, VP & Head of The Circle FC
The Union Budget 2025 brings encouraging measures for India’s startup ecosystem, particularly in access to funding and ease of doing business. Increasing the Credit Guarantee Cover for startups from Rs 10 crore to Rs 20 crore will help young businesses secure better financial support. The Rs 10,000 crore Fund of Funds is a welcome move to boost investment in high-growth startups. Extending tax benefits for startups incorporated before April 2030 shows the government’s long-term support for entrepreneurs. Simplifying compliance and rationalizing TDS/TCS will reduce unnecessary financial burdens, allowing startups to focus on growth. These steps will strengthen India’s position as a hub for innovation and entrepreneurship, making it easier for startups to scale and contribute to economic growth.

Gautam Madhavan, Founder & CEO, Mad Group
The Union Budget 2025 is a testament to the Indian government’s unwavering commitment to fostering entrepreneurship and innovation. The expansion of the Fund of Funds for Startups with an additional Rs 10,000 crore is a monumental step, providing much-needed capital support for emerging businesses. The increase in credit guarantees up to Rs 20 crore further strengthens financial accessibility for startups, ensuring a more resilient ecosystem. The extension of tax benefits for startups until 2030 is a visionary move, offering long-term stability and encouraging more founders to take bold steps in building the future of Bharat.

Mayank Maggon, Founder, CEO & CTO, TechChefz Digital
The Union Budget 2025-26 reflects a progressive step towards empowering India's MSME ecosystem. The enhancement of credit guarantee cover from Rs 5 crore to Rs 10 crore and the introduction of customized credit cards for micro-enterprises are commendable measures that will significantly improve liquidity and ease of doing business. Additionally, revising the classification criteria for MSMEs, with higher investment and turnover thresholds, will inspire businesses to scale operations without the fear of losing benefits tied to their status. The support for first-time entrepreneurs, especially women, SCs, and STs, through targeted term loans, underscores the government's commitment to inclusive growth.

Narain Karthikeyan, Founder, DriveX
The 2025 Budget is a strong step towards inclusive economic growth, bringing significant benefits across all sections of society. The increase in MSME turnover limits, along with enhanced credit access and intensive skill-development programs, will fuel entrepreneurship, business expansion, and youth employment. Additionally, the expansion of the Fund of Funds for Startups, with a fresh contribution of Rs 10,000 crore, coupled with an extension of incorporation benefits until 2030, will further strengthen the Indian startup ecosystem. These measures will enable greater innovation and growth, reinforcing India’s position as a global hub for entrepreneurship.