Union Budget 2025: Key Announcements and Reactions
Finance Minister Nirmala Sitharaman's presentation of the Union Budget 2025-26 on February 1, 2025, has placed significant emphasis on renewable energy, infrastructure development, and the tourism sector, as India strives to position itself as a leader in clean technology and sustainable growth.
A major allocation of INR 1,500 crore has been earmarked for solar power initiatives, marking the government’s commitment to enhancing the solar energy ecosystem. This budget introduces the National Manufacturing Mission, which aims to ramp up domestic production of solar photovoltaic (PV) cells, electric vehicle (EV) batteries, and more, effectively reducing reliance on imports.
Specific measures include reducing tariffs on key renewable energy components, such as lowering the import duty on solar modules from 40 percent to 20 percent, showcasing the government’s initiative to make clean energy technologies more affordable and accessible. The budget also promises reforms to electricity distribution, giving states the financial flexibility needed to strengthen their transmission networks.
Dr. Amit Paithankar, CEO of Waaree Energies Ltd., praised the budget, stating, "The Union Budget 2025 has strengthened India’s pledge to clean energy self-reliance by prioritising domestic manufacturing." He emphasizes the importance of the National Manufacturing Mission and the commitment to manufacturing incentives for lithium-ion batteries, which are pivotal for the solar and EV industries.
Further breaking new ground is the Nuclear Energy Mission announced under the budget, targeting the development of at least 100 GW of nuclear energy by 2047. The government will allocate INR 20,000 crore for research and development of Small Modular Reactors (SMRs), expected to operationalize five indigenous SMRs by 2033. This move has been seen as significant by industry leaders like Sumant Sinha, CEO of ReNew, who highlighted the balance between traditional and renewable energy sources.
The budget aimed not only at energy reforms but also significantly invested in tourism infrastructure and development, reflecting the government's strategic vision for employment-led growth. A notable allocation of INR 20,000 crore is extended to improve and develop the top 50 tourist destinations across India, pushing states to actively manage infrastructure development.
Prime Minister Narendra Modi echoed this sentiment, stating the government will include hotels at these destinations under the infrastructure category to stimulate tourism. This would create new economic opportunities and rejuvenate the hospitality sector, which has been recognized as the largest employment sector.
Reacting to the budget, Aashish Gupta, CEO of FAITH, shared, "Creation of hotel rooms supply can fast track the supply at these earmarked destinations." He also pointed out the proposed modifications to cruise tourism and the national initiative to promote the country's diverse tourist spots.
Budget 2025 has also been noted for its substantial investment aimed at improving urban infrastructure, with initiatives reflecting the government's commitment to urban development as well. Key investments include the introduction of the INR 1 lakh crore Urban Challenge Fund, set to support the modernization of urban infrastructure.
With all these allocations come measures aimed at uplifting the middle class; substantial tax relief measures are anticipated to boost consumer spending across sectors, including housing and urban development. The change in tax slabs, announced at the Budget, is expected to significantly benefit individuals with incomes up to INR 12 lakh, enhancing their disposable income for home purchases.
Housing Minister Manohar Lal Khattar expressed optimism post-Budget, asserting, "Budget 2025 will help improve quality of life in urban areas." He predicted the enhanced funding for infrastructure projects will lead to improved living conditions for urban citizens.
The budget also introduces measures aimed toward improving the Real Estate sector, focusing on expediting the completion of stalled housing projects through the SWAMIH Fund 2 with INR 15,000 crore allotted. This aims to address the needs of homebuyers, as emphasized by Madhur Gupta, CEO of Hero Realty, who stresses the need for timely implementations of budgetary promises.
Aditya Hans from Dhruva Advisors highlighted the government’s innovative approach to enhancing tax measures for businesses, including simplifications intended to position GIFT City as a leading global financial hub.
Overall, the Union Budget 2025-26 has been framed as not just fiscal planning but as a transformative blueprint for infrastructure, manufacturing, and sustainable growth aimed at uplifting the middle class and stimulating economic openness. Industry leaders have recognized it as not only timely but as necessary for paving the way for India's long-term ambitions for clean energy, economic resilience, and global prominence.
The success of these initiatives will rely heavily on collaborative efforts between the central government and state administrations, especially as the onus of executing these ambitious plans rests significantly with the states.