Healthcare- Attributed to Garima Malhotra, Associate
Partner, Healthcare and Lifesciences at Praxis Global Alliance
The Indian healthcare sector is at an exciting threshold of
transformational growth and looks towards Budget 2025 to focus on such
strategic initiatives that would work as a catalyst for growth. While last
year's budget saw a significant increase in healthcare spending, the sector is
hoping for continued momentum towards the National Health Policy's ambitious
goal of allocating 2.5% of GDP to healthcare. This year, the focus is expected
to shift beyond mere allocation increases to strategic investments that can
revolutionize healthcare delivery and accessibility across the nation.
Infrastructure: A key area of concern is the
persistent gap in healthcare infrastructure, particularly in rural and
underserved areas. The industry expects the budget to prioritize long-term
financing solutions for hospital construction and expansion. This includes tax
breaks, extended loan repayment periods, and public-private partnerships to
incentivize investment in tier 2 and 3 cities. Expanding diagnostic centers in
these regions is also crucial for early disease detection and timely
intervention.
Technology: Digital health is another area ripe
with potential. The budget is expected to further promote telemedicine and
AI-driven diagnostics, enabling remote consultations and faster, more accurate
diagnoses. Integrating these technologies into existing hospital workflows can
significantly improve efficiency and patient care. Investments in robust
digital infrastructure are also needed to ensure equitable access to these
advancements across the country.
Workforce: India faces a critical shortage of healthcare professionals,
from doctors and nurses to allied health workers. The industry is looking to
the budget to address this through increased funding for medical education and
skill development programs. Incentivizing specialization in critical areas and
promoting upskilling initiatives for existing healthcare workers can help
bridge this gap and ensure quality care delivery.
Accessibility:Expanding the reach of health insurance
is crucial for achieving universal health coverage. The industry hopes to see
increased coverage under the Ayushman Bharat scheme and initiatives to make
health insurance more accessible to the lower middle class. This will not only
provide financial protection but also boost patient volumes for hospitals and
diagnostic centers, enabling them to invest in further improvements.
Preventive care: A shift towards preventive healthcare is essential for
long-term health outcomes. The budget is expected to allocate increased funding
for nationwide screening programs, wellness initiatives, public health
awareness campaigns, and mental health programs. This will not only reduce the
burden of chronic diseases but also create opportunities for hospitals and
diagnostic centers to engage in early detection and intervention.
MedTech:The MedTech sector is a crucial enabler of
quality healthcare. The industry expects the budget to promote domestic
manufacturing by offering tax incentives to attract global manufacturers. To
further support affordability, reducing import duties on lifesaving equipment
is essential. Further, incentivizing R&D and streamlining regulatory
pathways will foster innovation and accessibility of essential medical
technologies.
The healthcare industry is optimistic that the upcoming budget will address
these critical areas and lay the foundation for a more robust and inclusive
healthcare system in India. By prioritizing strategic investments and fostering
innovation, the government can pave the way for a healthier and more prosperous
nation.
Pharmaceuticals- Attributed to Garima Malhotra,
Associate Partner, Healthcare and Lifesciences at Praxis Global Alliance
The Indian pharmaceutical industry anticipates Budget 2025
to introduce transformative measures that drive innovation, manufacturing, and
export competitiveness. While previous budgets have laid a strong foundation
with initiatives like Production Linked Incentive (PLI) schemes and an
increased R&D focus, the industry now looks forward to policies that
further align with India’s ambition of becoming a $130B pharma market by 2030.
This year’s expectations revolve around incentivizing research, streamlining taxation
frameworks, and fostering regulatory ease to bolster the sector’s growth and
resilience in an evolving global landscape.
R&D: India currently lags in drug development. To
tackle this, the government has outlined a 10-year plan to develop 16 APIs and
2 KSMs sustainably and cost-effectively. To further solidify India's global
leadership in the pharmaceutical sector and to further India’s goal of API
self-reliance, the industry expects increased government investment into drug
development parks, research institutes and fostering academia-industry ties.
Regulatory: The industry expects for the
establishment of a single, centralized regulatory authority ensuring alignment
with global standards and fostering ease of doing business. We expect the
government to introduce additional tax deductions, such as 1.25x for
expenditures on training and skill development initiatives
Taxation: The pharmaceutical industry urges the
government to extend the sunset date for the concessional 15% tax rate,
enabling companies to sustain local manufacturing growth under the "Make
in India" initiative. Additionally, the sector seeks clear guidelines to
classify free drug samples and promotional materials valued below INR 1K as
deductible marketing expenses. The industry also calls for definitive
clarifications affirming Input Tax Credit (ITC) eligibility for legitimate
business expenses, particularly those related to medical practitioners. The
current ambiguity often leads to liquidity constraints and prolonged tax
disputes, impacting operational efficiency. Furthermore, aligning GST rates for
APIs (currently 18%) with those of finished formulations (12% or 5%) is crucial
to resolving ITC accumulation, improving cash flow, and streamlining credit
refunds for manufacturers.
Infrastructure: Pharmaceutical infrastructure in
India is facing significant gaps, limiting the growth of manufacturing and
research capabilities. The industry expects the budget to address these
challenges by prioritizing long-term financing solutions, including tax
incentives, extended loan repayment periods, public-private partnerships, and
the establishment of dedicated innovation zones. Additionally, investments in
setting up manufacturing hubs, research facilities, and logistics networks in
tier 2 and 3 cities are essential to enhance production efficiency and drive
the growth of the pharmaceutical industry in India.
Consumer and Internet - Attributed to Shivaraj
Jayakumar, Practice Leader, Consumer & Internet at Praxis Global
Alliance
Reduce GST rates on mass-consumption FMCG products: Price
sensitivity among lower-income groups has led to a decline in mass-segment
consumption. By reducing GST on personal care and packaged foods from 18
percent to 12 percent the government can offset this decline & support FMCG
industry. A projected 8 percent increase in volume sales of mass-market FMCG
products leading to higher tax collections from increased consumption and a 0.5
percent boost in GDP.
Tax incentives for innovation in FMCG industry: Govt.
is expected to introduce a 150 percent weighted tax deduction on R&D
expenses for FMCG companies innovating in sustainable packaging and
health-focused products.
Tax incentives for rural market development and
innovation: Rural India accounts for over 35 percent of FMCG consumption
and is poised for significant growth if supported by better distribution
infrastructure and affordable products. Govt. is expected setup FMCG rural
growth fund with budget allocation of INR10K crore to strengthen rural
distribution networks and offer tax rebates for companies investing in
affordable rural product lines. A 10 percent growth in rural FMCG sales will
contribute an additional INR50K crore in annual revenue for the industry. Enhanced
R&D incentives would promote innovation, creating premium and sustainable
product categories with higher profit margins.
Reduction of custom duty: Rationalisation of custom
duty rates by reducing duties for inputs that are used for manufacture of
consumer products and increasing duties on direct import of finished products.
Financing to small retailers: Govt. is expected to
provide low-cost loans to small retailers thereby, fostering growth and
stability within the sector.
Expanding the PLI Scheme for the consumer goods industry: Expand
the scope of the Production Linked Incentive (PLI) scheme to consumer goods
industry, such as home appliances, personal care products and small consumer
electronics. An expanded PLI scheme will bolster India’s domestic manufacturing
capacity, reducing import dependency and addressing demand-supply gaps for
consumer goods. This policy is projected to attract substantial investments in
the sector, drive industrial output and support the creation of over 1 million
jobs within five years. Strengthening backward linkages and fostering
innovation will enable MSMEs to scale operations and contribute to the
manufacturing.
Policy changes to boost retail sector: Extending MSME
benefits to retail and wholesale traders, recognizing the F&B retail sector
as an essential service, low-interest financing, tax relief, and an accelerated
rollout of the national retail policy will help boost retail sector. 8. Regulating
in quick commerce industry: Implement regulatory measures to curb predatory
pricing and ensure transparency in fund usage by quick commerce platforms. This
includes introducing compliance with FDI norms, fair trade practices and supply
chain transparency. Regulating quick commerce practices will create a level
playing field, safeguarding the livelihoods of over 30 million Kirana stores
and 8 crore small retailers and distributors, which are vital to India’s retail
ecosystem. The policy will promote sustainable competition, ensuring quick
commerce platforms operate ethically and transparently. With improved
oversight, consumer trust in e-commerce will strengthen, while protecting
traditional retail sectors will contribute to a more equitable economic growth
trajectory.
Support for digital infrastructure and e-commerce:
Government investment in digital infrastructure is vital to boost e-commerce
and technology use in retail, with better connectivity, payment systems, and
technological advancements aiding businesses in improving efficiency, customer
outreach, and market competitiveness. Encouragement for omnichannel retail
approaches are expected to enhance the retail sector.
Higher income tax exemptions to boost disposable income: Indian
economy is facing a slowdown. The Q1 and Q2 GDP data have not been encouraging,
and the net GST collections have grown by 3.3 percent YOY. With consumption
accounting for over 60 percent of India's GDP, boosting disposable income is
critical to reviving demand. Relaxing the basic income tax exemption limit
under the old regime from INR2.5 lakh to INR3.5 lakh could lead to higher
disposable income. A 5-7% increase in disposable income for middle-income
households could lead to a 6% rise in consumer spending on FMCG & retail
Mobility Energy and Transportation - Attributed to
Kshiteej Mishra, Practice Leader, Mobility, Energy and Transportation at Praxis
Global Alliance
Lower GST and tax incentives for EV batteries and solar
components EV industry advocates for GST parity on batteries,
currently taxed at 18%, compared to 5% for EVs. A uniform rate would streamline
costs across the value chain and reduce the overall cost of EVs by 5%-10%.
Similarly, lowering the GST on solar manufacturing components, currently taxed
at 12%-18%, could significantly enhance the affordability of solar energy. This
move would encourage greater consumer adoption, boost domestic manufacturing,
reduce reliance on imported technologies, and potentially increase solar
installations by up to 15
Advocating for large-scale investments in renewable
energy and BESS Renewable energy in India relies heavily on wind and
solar power, which are abundant but not always consistent, creating an
imbalance between supply and demand. Battery Energy Storage Systems (BESS) can
solve this by storing excess energy when production is high and releasing it
when demand increases, stabilizing the grid. However, BESS is not yet
commercially viable. To encourage its use and improve grid reliability,
government subsidies and tax rebates for BESS are needed. For example, 10 years
ago, subsidies for solar energy helped make it widely adopted
Production-Linked Incentives (PLI) for new-age energy
tech PLI scheme has helped India’s EV and solar sectors grow, with INR
18,100Cr for battery technology and INR 4,500Cr for solar manufacturing between
2021-23. However, India is still far behind China in renewable energy
manufacturing. Expanding the scheme to focus on areas like offshore wind and
better energy storage is important. These steps can boost innovation, cut
reliance on imports, create jobs, and make India a global leader in renewable
energy while supporting sustainable growth
Consumer awareness and vendor network strengthening for
rooftop solar To scale rooftop solar adoption, enhancing consumer
awareness and strengthening vendor networks is essential. With 16.4 GW
installed in 2024 and a target of 40 GW by 2030, expanding certified vendor
networks will ensure quality installations and boost consumer confidence.
Additionally, clarifying the financial structure with low-interest loans or
financial assistance can ease the installation costs. Upgrading the National
Solar Portal will reduce technical issues and streamline project implementation.
These steps under the PM Surya Ghar Yojana will help increase rooftop solar
adoption and support India’s renewable energy goals
Infrastructure status for charging stations A
budget of INR 10,900Cr over the next five years is recommended to boost the
adoption of Electric Vehicles (EVs), set up charging infrastructure, and foster
the growth of an EV manufacturing ecosystem in India. This funding would
support the development of 46,000 charging stations by 2030, focusing on
underserved areas. It would also provide financing incentives by granting
infrastructure status to charging stations, lowering borrowing costs for
investors. Additionally, promoting public-private partnerships would expedite
network deployment and enhance service quality. These measures are crucial to
achieving 30% EV penetration by 2030, driving clean mobility, and reducing
fossil fuel reliance
Technology- Attributed to Aryaman Tandon, Managing
Partner, Technology at Praxis Global Alliance
Generative AI (GenAI) Generative AI (GenAI) is
set to transform industries by boosting automation, creativity, and
decision-making. Budget allocations should prioritize R&D, development, and
deployment of GenAI technologies. The government can support this by funding AI
research, incentivizing startups, and creating a regulatory framework. These
measures could potentially add US$ 15.7B to India’s economy by 2035, benefiting
sectors like healthcare, finance, and media, through enhanced efficiency and
the creation of new business models.
AI Data Centers AI applications need substantial
computational power, making investment in AI data centers crucial. The
government should incentivize the creation of energy-efficient, high-capacity
centers by offering tax rebates and grants. With the AI data center market
growing at 15% annually, India must expand infrastructure to stay competitive.
These investments will support AI model development, improve business
efficiency, and position India as a global leader in AI-driven
technologies.
Virtual Reality (VR) / Augmented Reality (AR) VR,
AR, and the Metaverse are reshaping sectors like gaming, education, and
healthcare. The government should allocate funds for R&D, affordable
hardware, and Metaverse expansion. Grants for VR/AR startups and training
programs will scale these technologies. By investing in these innovations,
India can create immersive experiences, improve remote learning, and drive
digital healthcare, positioning the country as a global leader in emerging tech
and boosting productivity across industries.
Technology’s role in revolutionizing other industries AI,
IoT, and automation are transforming agriculture, healthcare, and
manufacturing, driving efficiency and contributing to GDP growth. The
government should provide subsidies for adopting these technologies,
particularly in smart factories and AI healthcare solutions. Investments in
automation will modernize logistics and finance, boosting industrial
productivity and enabling India to achieve its US$ 5T economy goal, reducing
reliance on manual labor.
Startup opportunities in Tech India's tech sector offers
vibrant opportunities for startups in areas like AI, blockchain, fintech,
edtech, and healthtech. The government should support innovation hubs, provide
venture funding, and offer tax incentives to foster entrepreneurship. By
creating incubators and mentorship programs, India can scale startups and help
them access global markets, fostering a thriving ecosystem and positioning
India as a leading global tech hub.
Food & Agriculture- Attributed to Akshat Gupta,
Practice Leader, Food & Agriculture at Praxis Global Alliance
Increased budgetary allocation: We expect a higher
allocation than the previous INR 1.52 lakh crore to enhance agricultural
infrastructure, particularly in cold storage, warehousing, and supply chain
management. These investments are critical to reducing post-harvest losses and
improving market access for farmers
Lower interest rates on agricultural loans: We
urge the government to reduce & standardize agricultural loan interest
rates to 3-5%, easing financial burdens and improving access to credit.
Additional capital support for micro-irrigation systems, solar pumps, and
watershed projects is also essential to empower small and marginal
farmers
Greater support for SHGs and small farmers: For
2023-24, INR 40,475 Cr has been allocated under Rural Infrastructure
Development Fund (RIDF XXIX), bringing the cumulative allocation to INR
4,98,411 Cr, including INR 18,500 Cr under Bharat Nirman. We expect increased
allocations to NABARD and higher interest subsidies to reduce the cost of
credit for self-help groups (SHGs) and smallholder farmers
Doubling PM-KISAN support: Doubling the annual
installment under PM-KISAN from INR 6,000 to INR 12,000 would provide
much-needed financial stability and resilience to farmers
Revised GST for agricultural inputs: We anticipate a
reduction in GST on pesticides from 18% to 5%, along with GST exemptions on
seeds, agricultural machinery, and fertilizers. Additionally, zero-premium crop
insurance for small farmers under the Pradhan Mantri Fasal Bima Yojana would
offer vital risk coverage
Boosting agriculture exports: Agriculture
exports in India stood at ~US$ 48B in FY24, reflecting a decrease of ~10%
compared with US$ 53B in FY23. We expect the government to introduce targeted
initiatives, such as improving quality-testing infrastructure, offering
export-linked incentives for food processing, and enhancing global marketing
support for Indian agricultural products. These measures would not only make
Indian agricultural products more competitive globally but also drive a
significant increase in export volumes and value
Accelerating digital agriculture: The Union Cabinet
approved the 'Digital Agriculture Mission' on September 2, 2024, with a
financial outlay of INR 2,817 Cr, including INR 1,940 Cr from the central
government. We expect a renewed focus on the Digital Agriculture Mission,
including robust Agri-databases and frameworks, to modernize farming practices
and support private players in developing innovative digital solution
Improved Mandi infrastructure and MSP reforms:
Enhancing mandi infrastructure, expanding MSP coverage beyond 23 commodities,
disallowing imports below MSP, and setting minimum export prices only during
emergencies are necessary steps to safeguard farmer interests
Streamlined seed distribution: We expect ICAR
and other research institutions to take a lead in distributing improved seed
varieties, coupled with effective demand planning and outreach programs, to
replace farm saved seeds with higher-yielding alternatives 10. Support for
crop-focused clusters: We look forward to initiatives promoting crop-specific
clusters equipped with specialized machinery, affordable inputs, and advisory
services to drive productivity and profitability
Strengthened FPOs: We expect stronger support for
Farmer Producer Organizations (FPOs) through training, storage facilities, and
better access to institutional credit. Facilitating value-addition
opportunities would further enhance market access for FPO members
Insurance - Attributed to Vishal Bhave, Practitioner
Partner, Insurance at Praxis Global Alliance
The period before every budget is laced with expectations of
the Industry from the Finance Minister. This year, from an insurance
standpoint, given the aspiration of "Insurance for all by 2047", it
is imperative to implement measures to boost Insurance penetration. While on
the supply side, IRDAI is aggressively rolling out measures to enable ease of
doing business and promoting the cause of Insurance, there is a need to address
the demand side as well. The Insurance sector's wishlist includes doubling of deduction
limits under Section 80D for Health Insurance and a separate limit for Term and
Pension under Section 80C. There are suggestions to include exemptions for
Insurance under the New Tax Regime. While, one is not too sure of the above
given the Government's stated stance to move away from exemptions in the New
Tax Regime, what is doable and desirable is to revisit the GST rates - at least
for Term, Health Insurance and Pensions. Moreover, higher budgetary allocation
for Healthcare and setting up of a Regulator for Healthcare is important to
regulate costs/patient experience at Hospitals and address medical inflation -
which has a direct bearing on Insurance premiums.
Private Capital - Attributed to Akshat Gupta, Practice
Leader, Private Capital at Praxis Global Alliance
Fiscal Consolidation - The government should
target a 4.5% fiscal deficit for FY26. This would boost investor confidence,
lower borrowing costs, and attract more private investment by ensuring stable
finances and manageable debt.
Increased Government Spending - Increasing
government spending on infrastructure (roads, railways, ports, airports) will
drive economic growth as 1% GDP increase in infrastructure spending is
estimated to raise GDP growth by up to 1.5%.
Tax on Gains and Reforms on Tax Regime Reducing
long-term and short-term capital gains taxes would incentivize investment and
enhance returns. Treating carried interest as capital gains, not ordinary
income, and exempting it from GST to align with global fund management
practices.
Regulatory Ease - Government may reduce the
holding period for unlisted shares transferred under OFS in IPO to 1
year.
Addressing the backlog of tax appeals and
creating measures to prevent future disputes, ensuring a more predictable tax
environment. - Enhancing transparency and reducing bureaucratic hurdles through
digital solutions to improve regulatory compliance.
Measures like National Single Window System,
Alternative Dispute Resolution (ADR) mechanisms could be strengthened to ease
regulatory burdens and streamline approval processes for businesses, making it
easier for private equity firms to invest and operate in India
GIFT International Financial Services Centre (IFSC) -
The government should enable tax-neutral relocation of holding company
structures to GIFT IFSC, as recommended by the Committee on Onshoring Indian
Innovation, to attract FDIs
Reduce the tax on dividends from shares listed
on IFSC exchanges to 10% (from the current 20%) to enhance investor returns and
incentivize direct listings in GIFT City.