Focus On Agri, MSMEs Will Accelerate Growth

The Modi government tried to keep everyone in good humour through its Union Budget for 2025-26. Focus on agriculture, MSMEs will lead to accelerated growth, employment generation.

The Budget presented by Finance Minister Nirmala Sitharaman focused on poor, youth, farmers and women. Besides, importance has been given to Make in India, exports, innovation, investments and reforms.

On the innovation front in the labour-intensive agriculture, the Centre announced plans for crop diversification, post-harvest measures, improving irrigation and providing long and short term credit. These initiatives will be supportive for stocks of companies that focus on agriculture sector.

The government also enhanced credit guarantee for MSMEs to support employment which will give a boost to microfinance associated companies and banks. Doubling credit guarantee cover in will enable MSMEs access funds at competitive rates. MSMEs have an estimated credit gap of around Rs 28 lakh crore. Banks account for a significant share of MSME lending. For export oriented MSMEs, term loans up to Rs 20 crore would enable them access funds for capital expenditure / working capital at competitive rates.

To promote employment, government will also facilitate focused product scheme for leather and footwear. Obviously, it is a good sign for companies like Bata, Relaxo and Campus.

FM said in her eighth budget presentation that the government will allocate 1.5 trillion rupees as interest free loans for infrastructure. Again, it will act as a booster for Welspun, Vatech, EMS, VPRPL and Ion Exchange. Focus is also on energy transmission and nuclear energy. This is a timely help for power companies like REC, NTPC, Tata Power, etc.

For shipping sector too, a good initiative has been taken up by the central government. To address cost factor, the government will focus on special zones and ecosystem. It is supportive for Mazdock, SCI, Cochin and GE Shipping.

Coming to the aviation sector, the government will focus on greenfield airport and connectivity. There will also be UDAN 2.0 scheme. These will fuel growth of companies like Indigo, GMR and SpiceJet. The central government is set to develop top tourist destinations with key infrastructure.

In pursuit of insurance for all, the enhanced FDI limit in insurance sector to 100 per cent from 74 per cent would, as per CareEdge, provide necessary growth capital for the industry. It would also encourage more global players to look towards the country. Long term funding remains a key requirement for many insurance players. This move may address that concern.

Potential amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act are likely to facilitate the involvement of private sector participation in the nuclear sector.

Additionally, a dedicated research and development initiative for small modular reactors (SMRs) will be launched with an outlay of Rs 20,000 crore. As part of this mission, at least five indigenously developed SMRs are expected to be operational by 2033. These measures are likely to boost nuclear power capacity addition and help increase nuclear pool for insurers.