As India gears up for Union Budget 2025, there are multiple questions on table. How will the government sustain capital expenditure without straining its fiscal position? Can it balance economic growth with inflation management? Will job creation and skill development receive the push they need? And in a volatile global landscape with Trump coming to power January 20th onwards, how will India navigate geopolitical risks and trade disruptions?
To address these critical areas, ETBFSI convened a panel of BFSI leaders, moderated by Amol Dethe, Editor, ETBFSI & ETCFO. The conversation brought together Radhika Rao, Executive Director & Senior Economist, DBS Bank; Ajay Kanwal, MD & CEO, Jana Small Finance Bank; Manish Jaiswal, MD & CEO, Grihum Housing Finance; and Anand Roy, MD & CEO, Star Health Insurance, who shared their expectations and priorities for Budget 2025.Consolidation without expenditure compression
The theme of the budget should be consolidation without expenditure compression. That’s the biggest challenge for any government, including ours. They aim to continue spending while consolidating finances.Radhika Rao, Executive Director and Senior Economist, DBS Bank
“Last year, the assumption was 10.5 per cent, but the actual outcome seems to be less than 10 per cent. I expect a similar assumption of 10-10.5 per cent for FY26. Revenue growth is likely to be in the 9.5-10 per cent range, while capital expenditure could be closer to Rs 11 trillion. Unlike this year’s backloaded spending, FY26 allocations should stay on track. Achieving social sector objectives alongside capital expenditure will be crucial,” Rao elaborated.
I hope to see capex that directly impacts the common man. For instance, infrastructure spending that tangibly benefits people and addresses rural needs. A more formalised economy with reduced cash usage should also be a priority.Ajay Kanwal, MD & CEO, Jana Small Finance Bank
Addressing inflation management, Manish Jaiswal, MD & CEO, Grihum Housing Finance, said, “There’s a strong case to overhaul India’s inflation management strategy. Instead of broad measures to control food prices, targeted investments and reforms are needed. We must move beyond vegetables like tomatoes and onions dominating the economic narrative.”
Geopolitical dynamics and Budget 2025
Global uncertainties, including US monetary policy shifts and trade disruptions, are shaping economic strategies. The budget must account for geopolitical risks, especially with the US exploring tariffs and inflationary pressures, also concerns over the weakening rupee in recent weeks.Ajay Kanwal, MD & CEO, Jana Small Finance Bank
Reducing import taxes on intermediate goods and incentivising manufacturing is critical. Tax holidays and reforms can attract global players. India must also brace for potential impacts from US trade policies, such as universal import tariffs.Radhika Rao highlighted supply chain resilience.
She added, “The tariffs imposed during Trump’s term in 2018, which led to the removal of India’s Generalised System of Preferences (GSP), haven’t been reinstated. Such measures underline the need for a proactive strategy.”
Housing, which accounts for 47–48% of personal loans, requires robust liquidity structures for asset-liability matching. US monetary policies and interest rate adjustments will impact India, albeit with delayed transmission due to credit-deposit ratios and deposit growth challenges.Manish Jaiswal, MD & CEO, Grihum Housing Finance
Demands from the Insurance Sector
“The government’s growth-focused approach over the last decade is evident, but the emphasis must now shift to the quality of growth,” said Anand Roy, MD & CEO, Star Health Insurance. He emphasised the importance of healthcare investments, including digitisation and innovation in health infrastructure, to cater to India’s vast population.
“India currently has around 60 insurance companies, but there’s room for many more. Allowing 100 per cent FDI would attract international players, boosting investments in both existing and new ventures,” Roy suggested.
Skill and Job Mismatch
Demand-side initiatives like PLI are a step in the right direction, but matching skills with industry needs remains a challenge. A TeamLease survey shows 80 per cent of corporates see benefits, yet hiring remains limited due to skill gaps. This isn’t about unwillingness but the lack of the right skills. Expanding manufacturing, particularly in labor-intensive and export-oriented sectors, is important.Radhika Rao
“India can be a global workforce hub, especially in healthcare, as aging economies seek skilled professionals. Over the next five years, a strong push for skill development is needed, and CSR funding can support this,” said Manish Jaiswal, MD & CEO, Grihum Housing Finance.
Affordable housing companies are growing at 25–30 per cent, with manpower expansion of 15–20 per cent annually. We focus on hiring fresh talent and training them through digital, AI-driven, and hands-on programs, which CSR can help fund, Jaiswal added.
Anand Roy of Star Health Insurance said that the regulator has taken steps to boost rural employment, such as state insurance plans hiring women for grassroots distribution.
As Manish mentioned, allocating CSR budgets for job creation in rural markets would be a welcome move.Anand Roy, MD & CEO, Star Health Insurance