Post-Budget 2025: Industry Reactions from the Startup Ecosystem

• ByStartupStory     |    February 2, 2025

The Union Budget 2025 brings significant measures aimed at strengthening India’s startup ecosystem, MSMEs, and innovation-driven industries. Key highlights include a ₹10,000 crore Fund of Funds, the abolition of the angel tax, increased credit guarantee cover, and new initiatives to support gig workers and emerging technologies. Industry leaders from startups and venture capital firms have shared their reactions to the budget, emphasizing its impact on entrepreneurship, financial access, and economic growth.

Industry Reactions to Union Budget 2025

Payal Jain, Founder, Funngro

“The Union Budget 2025 recognizes the vital role of gig workers and startups in India’s growing digital economy. The government’s initiative to provide identity cards and e-Shram registration for nearly 1 crore gig workers, along with healthcare benefits under PM Jan Arogya Yojana, is a major step toward securing their future. Additionally, the ₹10,000 crore Fund of Funds for startups, higher MSME classification limits, and increased credit guarantee cover from ₹5 crore to ₹10 crore will fuel entrepreneurship and innovation. These measures will provide better financial access, stability, and growth opportunities for gig workers and young entrepreneurs. Funngro applauds this move and remains committed to empowering India’s youth and freelancers to thrive in the evolving job market.”

Bhavik Vasa, Founder, GetVantage 

“The Union Budget 2025 delivers a decisive push for India’s startup and MSME ecosystem. The abolition of the angel tax, a ₹1 Lakh Crore Innovation Fund, and a ₹10,000 Crore Fund of Funds signal a bold commitment to fueling AI, innovation, and risk capital. Doubling MSME turnover limits, expanding investment thresholds, and enhancing credit guarantees to ₹10 Cr reinforce the government’s vision of MSMEs as the second engine of the economy. These reforms aren’t just financial interventions—they are structural shifts that position India as a global hub for manufacturing, entrepreneurship, and innovation.”

Tanul Mishra, Founder, Afthonia Labs

“The budget focuses on four pillars of the Indian economy: Agriculture, MSMEs, Investment, and Exports, ensuring sustainable growth. The increase in Kisan Credit Cards is commendable, but the government must enhance the execution of incentives through stronger public-private partnerships.”

Startups

“The ₹10,000 crore Fund of Funds and a potential Deep Tech fund in the Union Budget 2025 will significantly boost India’s startup ecosystem. By targeting high-impact areas like fintech, AI, robotics, blockchain, and clean energy, this initiative will provide a much-needed boost to innovative startups. Afthonia remains committed to supporting innovation-driven entrepreneurship, aligning with our mission to nurture transformative startups.”

Mohit Singhal, Founder, Fundbook

“The Union Budget 2025 delivers a strong boost to India’s MSMEs, enhancing access to funding and credit. With an additional ₹10,000 crore allocated to the Fund of Funds for Startups, early-stage ventures will find it easier to secure growth capital, fostering innovation and expansion. The revised MSME classification—raising investment limits by 2.5 times and doubling turnover thresholds—ensures that more businesses can retain MSME benefits like tax breaks, priority lending, and government contracts. This will encourage growth without fear of losing crucial incentives.”

Adith Poddar, Founder, Gemba Capital

“This budget is a significant boost for the middle class in India and has been long overdue. The increase in the tax exemption limit to 12 lakhs is expected to further stimulate domestic demand and consumption. The ‘Make in India’ initiatives aligned with expectations, particularly the rationalization of customs duties for electronic components, batteries, and open cell parts.”

Mehul Shah, Founder, Intelligere

“As an entrepreneur, I find this year’s budget quite exciting. The finance minister has taken a commendable approach by prioritizing digital transformation, which will certainly benefit businesses in the long run. The increased focus on ease of doing business and the introduction of reforms to promote MSMEs and startups is a welcome move. These initiatives can help provide much-needed support to entrepreneurs and foster innovation. Overall, it’s a step in the right direction, but the real impact will depend on the fine print.”

Saahil Bhanot, Founder, Sylvr

“The higher investment, turnover limits, and credit guarantee covers will relax several lakhs of MSME entrepreneurs who were conflicted in the previous slabs. The government has progressively revamped policies to bring better days to MSMEs and lift them from the bygone cottage industry era.”

Giridhar LV, Founder, Nuvepro Technologies

“The establishment of a Centre of Excellence for Artificial Intelligence with a ₹500 crore allocation in the Union Budget 2025 should provide a much-needed impetus for AI-driven research and job creation focused on addressing India-specific challenges.”

Rohith Vedira, Co-Founder & CEO, Sathpay

“The Indian government’s fresh ₹10,000 crore fund for startups and the expanded credit guarantee scheme for MSMEs mark a significant step toward fostering entrepreneurship. However, access to risk capital remains a key differentiator between India and markets like the U.S.”

Shashank Singh, Co-Founder, Poshn

“The establishment of the Food Processing Board in Bihar is set to unlock significant opportunities for new SMEs and boost economic growth in the region. Bihar is home to several unique agricultural products, including Foxnuts (Makhana), Sattu, and Zardalu mangoes—items that are exclusive to the state.”

Kundan Shahi, Founder, LegalPay

“The Union Budget 2025 delivers transformative support for startups and MSMEs, paving the way for bold growth and innovation. Startups gain a significant advantage with the extension of Section 80-IAC tax benefits and an increased credit guarantee cover of ₹20 crore, now available with a reduced 1% guarantee fee across 27 sectors.”

Shivam Thakral, CEO of BuyUcoin

“The Union Budget 2025, presented today, has left the Web3 sector with mixed feelings. While there were no specific announcements addressing the unique challenges faced by this innovative space, the Finance Minister’s commitment to rationalizing tax deduction at source (TDS) is a step in the right direction.”

Rishi Das, Executive Director & CEO, IndiQube

“The Union Budget brings a host of positives for the Indian startup ecosystem. The new Fund of Funds, with an additional ₹10,000 crore contribution, is a significant boost, ensuring greater access to capital, fostering innovation, and enabling startups to scale faster.”

Divya Kothamasu, Founder, N Space Tech

“The announcement of the National Geospatial Mission in the budget signals a forward-thinking approach to nation-building, where data-driven insights will power smarter cities, efficient infrastructure design, and transparent land management systems.”

Meena Kapoor Co- founder and CEO of Astroyogi

“The government’s Rs 2-crore term loan scheme for first-time women entrepreneurs is a game-changer, empowering more women to turn their aspirations into thriving businesses. Access to capital has long been a barrier, and this initiative will provide the much-needed financial push to foster innovation, self-reliance, and economic inclusion. As a woman entrepreneur, I see this as a strong step towards building a more diverse and resilient business ecosystem in India”.

Swati Bharagava, Co-founder of CashKaro and EarnKaro

“With the announcement of an additional ₹10,000 crore for the Fund of Funds for Startups (FoF for Startups) scheme, the government has reinforced its commitment to India’s thriving startup ecosystem. This initiative, now totaling ₹20,000 crore, significantly strengthens the funding landscape for emerging ventures. With the FoF for Startups already securing commitments exceeding ₹9 lakh crore, it’s clear that confidence in India’s startup potential is at an all-time high. This move will accelerate innovation, reduce reliance on foreign capital, and empower homegrown businesses to expand globally.”

Ram Sellaratnam, Group CEO and Managing Director, iBUS Network

“The doubling of MSME limits is a much-needed boost for India’s evolving digital infrastructure industry, enabling businesses to achieve greater scale and competitiveness. Additionally, the reduction in BCD on internet equipment and lithium batteries will significantly benefit the telecom sector by improving network resilience and expanding connectivity. Lower mobile costs will accelerate 5G adoption, further driving digital transformation. The reduction in IT tax slabs will strengthen middle-income spending, positively impacting retail and hospitality sectors. Lastly, the commitment to bringing the fiscal deficit down to 4.8% showcases strong economic discipline, enhancing India’s attractiveness for FDI and making capital more accessible to high-growth companies.”

The replenishment of ₹10,000 crores to SIDBI’s Fund of Funds for VCs is a powerful move to catalyze innovation and entrepreneurship. This infusion will drive growth across emerging sectors, including climate tech, fostering a vibrant ecosystem for startups in India.

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