New Delhi: The Union Budget 2025 has been hailed as a “game-changing catalyst” for India’s economy and startup ecosystem by key leaders from the Startup Policy Forum (SPF). The budget includes several provisions aimed at supporting startups, MSMEs, and the middle class, while also fostering innovation and financial inclusion.
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Key Provisions for Startups and MSMEs
The Union Budget 2025 introduces several bold measures to boost India’s startup and MSME ecosystem, which has seen rapid growth in recent years. These measures include:
- Tax Relief for Middle Class: The revised income tax structure is expected to increase disposable income, which, according to Kunal Shah, Founder of CRED, could drive a significant rise in consumption, especially among Generation Z.
- Enhanced Credit Access for MSMEs: The credit guarantee cover for MSMEs will be increased from Rs 10 crore to Rs 20 crore, with the guarantee fee reduced to 1% for loans in 27 focus sectors crucial for the Atmanirbhar Bharat initiative.
- Fund of Funds for Startups: The government has allocated Rs 10,000 crore towards the Fund of Funds, which has already received commitments of over Rs 91,000 crore through Alternate Investment Funds (AIFs) aimed at supporting startups.
Empowering Retail Investors and Financial Inclusion
Lalit Keshre, Co-founder and CEO of Groww, noted that the revised tax structure would empower the middle class, leaving more money in their hands to allocate toward wealth creation. This shift is expected to drive the financialisation of savings, encouraging more retail investors to focus on building long-term financial security.
The leaders also believe that the provisions will have a significant impact on India’s financial landscape, making the country an even more attractive destination for investors.
Support for Innovation and Economic Growth
Ritesh Agarwal, Founder and Group CEO of OYO, emphasized that the focus should not only be on capital but on building an “innovation economy.” He pointed out that empowering both AI researchers and small-town entrepreneurs will help create a thriving innovation ecosystem in India.
Aloke Bajpai, Group CEO of ixigo, welcomed the government’s continued support for regional connectivity, especially through the UDAN scheme, which will benefit travelers from tier-2 and tier-3 cities, thus promoting inclusion and growth across the nation.
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India’s Position as a Global Startup Hub
With more than 1.59 lakh startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT), India has established itself as the third-largest startup ecosystem in the world. The measures introduced in Budget 2025 are expected to fuel further growth in the startup sector, ensuring that India remains an attractive hub for innovation and entrepreneurship.