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    HomeBusiness InsightsEnergy, Healthcare, and Manufacturing Sectors Eye Growth and Reforms in Union Budget...

    Energy, Healthcare, and Manufacturing Sectors Eye Growth and Reforms in Union Budget 2025

    As India prepares for the Union Budget 2025, stakeholders across the energy, healthcare, utilities, and manufacturing sectors are voicing their expectations, focusing on growth, sustainability, and competitiveness.

    Energy Sector: The energy sector anticipates increased financial incentives for renewable energy projects. Industry experts advocate for reducing GST rates on renewable components, such as solar panels, to 5%. Additionally, there are calls for viable gap funding for green hydrogen and offshore wind projects, alongside subsidies to boost domestic manufacturing. These measures are crucial for India to meet its renewable energy targets and reduce its carbon footprint.

    Utilities: In the utilities sector, there is a strong demand for significant investments in grid modernization and clean energy infrastructure. Stakeholders hope the 2025-26 budget will allocate substantial funds to enhance transmission networks and facilitate renewable energy integration. This is essential to meet growing energy demand and ensure a reliable, sustainable power supply.

    Healthcare: Healthcare industry leaders are calling for a funding increase from the current 1.9% of GDP to at least 2.5% to improve infrastructure and service delivery. Reforms are needed to enhance access to modern diagnostics, rare medicines, and digital healthcare solutions. The Medical Technology Association of India highlights the impact of high customs duties on non-substitutable medical devices, affecting patient affordability. Rationalizing these duties is seen as critical for making healthcare more accessible.

    Manufacturing: The manufacturing sector remains a focal point under the “Make in India” initiative, aiming to encourage domestic manufacturing, create jobs, and reduce import dependency. In FY2024-25, the government allocated ₹1.97 lakh crore under the Production-Linked Incentive (PLI) schemes across 14 sectors. As the new budget approaches, there are high expectations for increased PLI scheme allocation in FY2026, particularly for labor-intensive sectors, to strengthen India’s manufacturing capabilities and drive economic growth.

    Balancing act between growth and fiscal prudence in Union Budget 2025

    As the Indian economy faces a slowdown, with GDP growth dropping to 5.4% in Q2 2025 from 8.6% in Q3 2024, coupled with underwhelming corporate earnings, declining stock markets, and a weakening INR, the backdrop is indeed challenging. The government’s budgetary strategy will be crucial in reversing this trend in the upcoming Union Budget 2025.

    To rejuvenate growth, the government is expected to announce a capital expenditure of INR11 trillion, focusing on infrastructure and the Make in India initiative. A new INR250 billion PLI scheme for electronic components is anticipated to boost domestic manufacturing. Indian Railways is set to receive a 15-20% increase in funding, reaching approximately INR3 trillion. This will support modernization, new Vande Bharat trains, and expanded cargo capacity, enhancing the nation’s transportation infrastructure.

    Also read: What Industry Leaders Anticipate from Union Budget 2025

    Despite the need for economic stimulus, the government aims to tighten the fiscal deficit target to 4.5% of GDP from 4.9% in FY25. Buoyant tax collections will provide the flexibility needed to balance spending and deficit reduction. The Finance Ministry may also offer guidance on shifting to a target debt ratio, signaling a commitment to sustainable fiscal management.

    While major changes in personal income tax are unlikely, an increase in the basic exemption limit from INR 3 lakh to INR 5 lakh could provide financial relief to the middle class and stimulate consumption-driven growth. 

    The article has been written by Mohit Mittal, Global Head Sell Side Research, Acuity Knowledge Partners

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