New Delhi [India], January 27 (ANI): The Union government, in its upcoming Budget 2025, may announce innovative measures to boost infrastructure, agriculture, MSMEs, and other critical sectors, according to a report by the State Bank of India.
These measures could include alternate funding sources, targeted production-linked incentive (PLI) schemes, and strategies to strengthen India’s green economy and disaster management.
It said: “Government may introduce alternate sources of funding to infrastructure projects, which are generally cheaper than loan markets for better rated borrowers like Tax Free Bonds, Tax Paid Bonds, etc.” This approach could lower financing costs and boost infrastructure development.
In agriculture, the report suggested the creation of an omnibus Credit Guarantee Fund Trust for Agri & Allied Sectors (CGFTAAS). This would act as a credit accelerator by ensuring coverage for fresh agricultural loans, including Agri Value Chain Financing (AVCF).
It also recommended implementing the 2021 report on the agricultural value chain to improve the sector’s efficiency.
The housing sector could see changes in the definition of Priority Sector Lending (PSL). Projects costing Rs 65 lakh in six metro cities and Rs 50 lakh in other regions may now qualify as affordable housing under PSL, a revision from the 2018 criteria.
For MSMEs, the report recommended introducing PLIs for key sectors such as textiles, garments, handicrafts, food processing, leather, electronics, and auto components.
It also suggested increasing the allocation to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and incentivising banks to expand MSME loan coverage.
The budget may also focus on sustainability with the introduction of a green taxonomy to channel funds towards India’s climate commitments under the Nationally Determined Contributions (NDC) submitted to the UNFCCC.
Additionally, the report proposes the establishment of a Disaster Pool to manage risks of natural disasters. Modelled on the existing Nuclear and Terrorism Pools, this public-private insurance initiative could mitigate financial losses from calamities.
The education sector could see reforms through collaborations with global institutions and the establishment of overseas centres for Indian institutes to attract international students. This move aligns with India’s goal of becoming a knowledge-driven economy.
As per report, these recommendations aim to promote economic growth, resilience, and sustainability across key sectors. (ANI)
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