Key Industries Set to Gain from Budget 2025

resr 5paisa Research Team

Last Updated: 29th January 2025 - 06:15 pm

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As the Union Budget 2025 approaches, discussions around its potential impact on various sectors are gathering momentum. Certain industries potentially appear certain for significant growth based on the government's past priorities and broader economic objectives. Here’s a closer look at the industries that could gain from the upcoming budget and the measures likely to drive their progress.

1. Railways

The railway sector may emerge as a central focus in the 2025 Union Budget, with significant investment expected to modernize and expand its infrastructure. According to a Nuvama report, the government is planning to allocate over ₹50,000 crore for new railway tracks in FY26, marking a 50% increase from the previous year.

This increased funding could potentially accelerate the development of semi-high-speed trains like Vande Bharat, improve the safety and efficiency of tracks, and expand the railway network to underserved regions. Notably, railways may surpass highways in infrastructure spending, reflecting a strategic shift.

Apart from its logistical advantages, railways’ potential to significantly reduce greenhouse gas emissions positions it as a key player in the government’s sustainability agenda. 

2. Infrastructure and Real Estate

Infrastructure and real estate are likely to remain pivotal in achieving India’s Viksit Bharat @ 2047 vision. With ₹11.11 lakh crore allocated to infrastructure development in the previous budget, a similar or increased allocation could continue driving growth in this sector.

The infrastructure sector, predominantly funded by government capital expenditure, could see enhanced investment in roads, bridges, ports, and airports. Real estate, on the other hand, anticipates policy changes, including tax reforms on housing loans and reduced GST on construction materials like cement and steel, making homeownership more affordable.

The government may also streamline approval processes for affordable housing projects and promote public-private partnerships to address urban housing demand. Incentives for rental housing and urban housing schemes targeting middle-income groups could further transform the sector, making it more accessible and inclusive.

3. Electric Vehicles (EVs)

The electric vehicle (EV) industry may receive substantial policy support in Budget 2025 as India seeks to address environmental concerns, energy security, and economic sustainability. Simplified GST structures for EVs, along with tax incentives for battery manufacturing and charging infrastructure, are expected to accelerate EV adoption.

The government has already introduced several schemes, such as the FAME India and PLI initiatives, to promote EV manufacturing. Additional measures, such as a carbon credit trading framework and a push for Green Bonds, could further incentivize industries to transition to cleaner technologies and attract sustainable investments.

With a growing emphasis on eco-friendly transportation, the EV sector has the potential to play a transformative role in reducing India’s carbon footprint.

4. Healthcare and Insurance

The healthcare sector could see a notable increase in funding, potentially reaching 5% of GDP. Such an allocation may bridge longstanding gaps in rural healthcare infrastructure and enable upgrades to district hospitals. Investments in AI-based diagnostics could revolutionize early disease detection, particularly for chronic illnesses like cancer.

Additionally, the government may prioritize mental health by integrating services into primary care and expanding telemedicine facilities to underserved regions. Public-private partnerships could also facilitate the establishment of state-of-the-art medical facilities, enhancing healthcare accessibility.

In the insurance sector, tax exemptions for premiums may encourage more citizens to invest in insurance policies, supporting the growth of general insurance. With India projected to become the sixth-largest insurance market globally by 2032, the focus on technological advancements and deeper market penetration could drive long-term growth.

Conclusion

Budget 2025 has the potential to shape the trajectory of several key industries in India. While these expectations remain speculative, the railways, infrastructure, real estate, electric vehicles, healthcare, and insurance sectors may benefit significantly from the anticipated allocations and policy measures.

These sectors not only align with India’s long-term economic and sustainability goals but also represent opportunities for growth, innovation, and development. As we await the official announcements, strategic investments in these industries may pave the way for a brighter and more inclusive future.


 

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