As the 2025 Union Budget approaches, industry leaders across the BFSI, crypto, wealth management, and microfinance sectors are voicing their expectations for policy measures that will drive economic growth, financial inclusion, and investment opportunities. With a focus on taxation reforms, capital market stability, infrastructure investments, and digital asset regulation, stakeholders are hoping for a budget that balances growth with fiscal prudence.
Crypto Industry Seeks Taxation Reforms for Market Growth
The Virtual Digital Asset (VDA) sector has immense potential to contribute to India’s digital economy. Ashish Singhal, Co-founder of CoinSwitch, emphasized the need for taxation refinements, stating, “The upcoming Budget provides a crucial moment to refine taxation policies, fostering both growth and compliance within the sector.”
Singhal urged the government to lower the Tax Deducted at Source (TDS) on VDA transactions from the current 1% to 0.01% to ease compliance challenges while maintaining transaction transparency and revenue tracking. He recommended, “Raising the TDS applicability threshold from INR 10,000/50,000 to INR 5,00,000. This would protect small investors and traders from undue tax burdens, ensuring fair treatment across the board. To further support the industry’s growth, we advocate for aligning the taxation of VDA income with other asset classes and removing the current discriminatory treatment. Allowing taxpayers to set off or carry forward losses, as permitted under capital gains provisions, would establish parity and create an environment for innovation.”
“We are hopeful that the government will recognize the VDA industry’s potential and take steps toward balanced and progressive policies that enable its growth.” he added.
Encouraging Long-Term Investments Through Policy Support
The personal finance sector anticipates tax incentives to encourage investor participation. Mayank Bhatnagar, Co-founder and COO of FinEdge, stressed the need for measures that “empower investors and enhance financial planning opportunities.”
Expanding tax incentives on investments in mutual funds and equity-linked instruments could foster long-term wealth creation. Additionally, simplifying tax laws and aligning them with global best practices could create a more investor-friendly environment. “Policies that focus on long-term capital gains tax structures and incentivize investments in asset classes like equity would be highly welcome,” Bhatnagar added.
Taxation Reforms to Boost Market Participation
The capital markets are hoping for relief from increased trading costs and capital flight concerns. Devam Sardana, Business Head at Lemonn, pointed out, “In the last budget, there was a dual impact of STT increase and LTCG increase (on listed shares) on the users with an increase in trading costs as well as impact on profitability of the users. Given that the revenue generation would have significantly increased with STT, this can potentially be used to revert the LTCG to 10% in order to ensure even higher market participation and incentivise long-term investment which is critical for the users and the capital market stability. This can also address reduction in the flight of capital from India towards global markets and potentially contribute to rupee appreciation as well.”
Wealth Management Industry Hopes for Growth-Oriented Budget
Himanshu Kohli, Co-founder of Client Associates, acknowledged the government’s consistent approach to economic policy. “Although there is so much excitement surrounding the Budget, it is business as usual for the government,” he remarked, emphasizing a focus on long-term growth and fiscal discipline.
On investment reforms, Kohli noted, “There is an expectation that the government will reinstate the indexation benefit for debt mutual funds. If this change happens, it will once again make debt mutual funds a more attractive investment option than fixed deposits.”
He also highlighted global economic factors, particularly the impact of the Trump administration’s policies. “Oil prices are expected to decrease due to increased domestic production, benefiting India. However, strong U.S. economic growth policies may lead to currency volatility, with the rupee likely to weaken,” he explained.
Balancing Growth and Fiscal Prudence Amid Economic Pressures
With revised growth forecasts and urban demand weakening, Satish Chandra Aluri of Lemonn Markets Desk highlighted the critical juncture at which this budget arrives. “The 2025 budget arrives at a critical juncture, with growth forecasts revised to four-year lows, urban demand weakening, and the INR under pressure post-Trump’s surprise victory. As this will be Prime Minister Narendra Modi’s first full budget in his third term, it must balance growth revival with fiscal discipline.” he noted.
“Key expectations include renewed focus on infrastructure spending, export promotion via tariff rationalization and MSME support, and targeted tax reforms to boost middle-class consumption. Defence spending is likely to rise in absolute terms, with emphasis on modernization and indigenization. Priority sectors like green energy, semiconductors, and EVs may see enhanced PLI allocations of ₹30,000–40,000 crore in the coming months.”He added.
Microfinance Sector Calls for Liquidity Support
Dr. Alok Misra, CEO & Director of the Microfinance Industry Network (MFIN), underscored the importance of financial inclusion. “The sector contributes 2.03% to India’s GVA and serves 8 crore low-income clients. We are not just talking about financial services – we are discussing the backbone of grassroots economic empowerment.”
With liquidity constraints challenging the sector, Misra called for a dedicated refinance facility and the reinstatement of the Credit Guarantee Scheme introduced in 2021. “Both these measures will help lower the cost of funds and ensure uninterrupted credit flow to the underserved,” he added.
MSME Sector Seeks Enhanced Credit Accessibility
Tarun Singh, Founder & MD of Highbrow Securities, stressed the importance of sustaining growth momentum for MSMEs. He Stated, “‘I’m excited to see how the government builds on the momentum of previous years to drive growth in India’s MSME sector. Sustaining this momentum is crucial, with a focus on bridging the swelling debt funding gap that persists for SMEs. Enhancing credit accessibility and simplifying IPO listing procedures will offer vital support.”
To reduce operational costs, Singh recommended targeted interest subvention schemes, along with policy incentives such as tax reliefs, sector-specific subsidies, and digital transformation support. “With the government’s focus on fiscal prudence and growth-driven policies, I’m optimistic that the budget will strike the right balance to drive India’s economic trajectory forward,” he concluded.
A Roadmap for Growth and Stability
As the finance and BFSI sectors eagerly await the 2025 Union Budget, industry leaders are aligned in their call for policy measures that promote long-term investment, financial stability, and economic resilience. Whether through taxation reforms, credit accessibility, or investment incentives, the government’s approach in this budget will play a crucial role in shaping India’s financial future.
