This years budget has been a huge relief for the middle class tax paying citizens of India. Given India’s rising middle class population I think this move would help a lot of financially burdened people immensely.
However, while the tax reforms have been covered widely across different channels, there are many other reforms that directly impact normal citizens like you and me. Not so surprisingly a lot of these have not been covered extensively.
With this post, I wish to highlight the top 5 announcements in the budget that I believe have a direct and positive impact on the all of us. I’m personally excited to see each of these announcements play out in 2025 as they have massive potential.
1. Formation of Investment friendliness index of states
The government think tank NITI Aayog is developing an Investment Friendliness Index, that would rank states based on how friendly the state is for business and investments. This move brings in competition among states to improve at an overall level (infrastructure, Labour policies, Tax incentives and more).
How does this affect you?
At the end of the day, it helps people like us get an improvement in our daily lives through better roads, better incentives to start business and even better law and order. Also states can attract more investments based on their ranking to improve job availability and conditions in their respective states.
2. Allow 100% ownership of foreign investors in the insurance sector from current 74%
This means foreign companies can now run insurance companies in India without requiring any Indian partner. I expect this move to bring in more foreign insurance companies to launch in India. This increases competition and can bring about good changes in the insurance sector.
How does this affect you?
With increased competition you can expect better services, rates and even more innovative offerings in the insurance space. Insurance is a must for every individual and this change is a welcome towards increasing the penetration of insurnace in India. I’m excited to see if large insurance companies like Kaiser Permanente launch in India with their model that has worked extremely well in the US.
3. Revamped central KYC in 2025
Central KYC is a unified government managed repository that stores customer KYC details and allows financial institutions to access them. This allows financial institutions to not let the customer repeatedly submit their KYC documents for every product like opening a bank account, buying insurance, investing etc. Previously the CKYC infrastructure was riddled with issues such as incorrect details being fetched, downtimes and more hence companies did not use this extensively. The revised CKYC promises to bring in much lower downtime and higher accuracy.
How does this affect you?
The time to open a bank account, buy insurance or take a loan would be reduced drastically since your KYC documents can be accessed by the institution directly with your consent. Also it reduces the chances of fraud that take place when a fraudster submits fake documents for verification.
4. 5 lakh Entrepreneurs to get loans upto 2cr during the next 5 years
To encourage more investors to build business in India, government aims to give 5 lakh entrepreneurs term loans upto 2cr over the next 5 years.
How does this affect you?
If you’re an aspiring entrepreneur, it looks like it might become easier to access funds to build a business that might require capital. For other people, with more money being infused into business we are likely to see more job opportunities as people start building more businesses.
5. Partial Credit Enhancement (PCE) Facility by NaBFID to support corporate bonds and infrastructure development
NaBFID(National Bank for Financing Infrastructure and Development) is a government-backed development finance institution (DFI) focused on infrastructure financing. Partial Credit Enhancement means NaBFID will provide a limited guarantee or financial backing to corporate bonds, reducing risks for investors.
How does this affect you?
Since NaBFID would partially back (partially guarantee) bonds, it reduces the risk for investors who are participating in the bond market. I expect to see an increase in private investor participation in the bond market including a surge of retail investors as well.
I personally look forward to each of these announcements and I’m also optimistic on these playing out to give a positive impact on our lives as well as India’s growth. Do let me know your thoughts in the comments.
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