The Union Budget 2025 has been lauded by startup leaders and industry experts as a transformative force for India’s economic landscape and innovation ecosystem. Key provisions such as tax relief for the middle class, enhanced credit access for Micro, Small, and Medium Enterprises (MSMEs), and the establishment of a new Fund of Funds for startups are expected to drive consumption, foster entrepreneurship, and promote inclusivity.
Kunal Shah, Founder of CRED, highlighted the potential impact of the revised income tax limits, stating, “New income tax limits could cause a big jump in Gen Z consumption spends.” Lalit Keshre, Co-founder and CEO of Groww, emphasized the empowerment of retail investors, noting that the revised tax structure leaves more money in hand for the middle class, enabling them to allocate more towards wealth creation. He added, “This will further boost financialisation of savings, as retail investors look to build long-term financial security.”
The Budget proposes increasing the credit guarantee cover for startups from ₹10 crore to ₹20 crore, with a moderated guarantee fee of 1% for loans in 27 focus sectors critical to the Atmanirbhar Bharat initiative. Additionally, the Alternate Investment Funds (AIFs) for startups have received commitments exceeding ₹91,000 crore, supported by the Fund of Funds established with a government contribution of ₹10,000 crore.
Ritesh Agarwal, Founder and Group CEO of OYO, expressed enthusiasm about the government’s commitment, stating, “We need to look beyond the ₹10,000 crore headline – what’s exciting isn’t just the capital, it’s the confidence.” He emphasized the importance of empowering both AI researchers and small-town entrepreneurs to create an innovation-driven economy.
Aloke Bajpai, Group CEO of ixigo, expressed satisfaction with the government’s continued prioritization of the UDAN scheme to enhance regional air connectivity, which is expected to benefit the travel and tourism sector.
Major Sunil Shetty, Founder and CEO, MyStartupTV, said ” Funds of Funds is a good initiative, but what’s crucial is hassle-free access for startups. Founders are struggling to secure investments on time, and delays often mean missed opportunities that can be critical to their growth”.
With over 1.59 lakh startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT), India has solidified its position as the world’s third-largest startup ecosystem. The measures introduced in the Union Budget 2025 are anticipated to further strengthen this ecosystem, creating new opportunities for businesses and investors, and positioning India as a global economic powerhouse in the 21st century.
