
India’s economic landscape is evolving amid global uncertainties, yet the country remains on a strong growth trajectory. The Union Budget 2025 reinforces India’s commitment to inclusive growth, fiscal discipline, and economic competitiveness.
With a strong push for infrastructure, manufacturing, agriculture, and entrepreneurship, the budget lays a foundation for long-term expansion. Increased public investments, skilling programmes, and ease of doing business reforms benefit industries from MSMEs and startups to large-scale manufacturing and exports.
For FMCG, the budget aligns with economic priorities while addressing industry challenges. It focuses on four key pillars — poor, youth, farmers, and women — ensuring increased credit availability to drive entrepreneurship and job creation. The MSME credit guarantee limit has doubled to Rs 10 crore, while microcredit card limits of Rs 5 lakh will enhance liquidity and boost consumption.
Agriculture and food processing receive a major boost with the six-year pulses mission and expansion of Kisan Credit Card limits from Rs 3 lakh to Rs 5 lakh. These interventions will strengthen farm incomes, bolster rural purchasing power, and create a positive ripple effect on FMCG demand.
Infrastructure investments, crucial for industry-wide growth, have been prioritised. The Rs 1.5 lakh crore interest-free loan for state capital expenditure will enhance logistics and distribution networks, benefiting FMCG, especially in tier-2 and tier-3 cities. Additionally, the tax-free income threshold increase to Rs 12 lakh will leave more disposable income in consumers’ hands, driving higher discretionary spending.
However, the budget falls short in fostering technological innovation and emerging industries. While the National Manufacturing Mission is a welcome move, greater R&D incentives, digital transformation, and investment in AI, robotics, and green energy are essential. Stronger support for technology-driven startups and research hubs could accelerate India’s global innovation leadership.
While the fiscal deficit is projected at 4.4% of GDP for FY26, balancing economic expansion with tighter deficit control remains crucial. A broader rural demand stimulus beyond agricultural credit — such as direct employment initiatives or consumption-linked incentives — could further strengthen weaker markets. Additionally, reduced GST rates on essential FMCG products and targeted tax incentives could have further stimulated demand and affordability.
Overall, Budget 2025 sets a positive tone with strong measures supporting credit access, tax relief, and infrastructure. However, to sustain momentum, India must prioritise proactive policy execution, R&D incentives, and a sharper focus on emerging industries. Strengthening domestic consumption, advancing technology, and positioning India as an innovation hub will be key in shaping long-term economic growth.”
C K Ranganathan
Chairman & Managing Director,CavinKare