Focus is on Creating Jobs through Growth & Investments

Budget 2025-26 priorities job creation through growth and investments, introducing several employment-focused initiatives across multiple sectors. Building on the Employment Linked Incentives (ELI) announced in Union Budget of July 2024-25, this budget takes a comprehensive approach to employment-led development.

Development via Employment

Enabling employment-led development is one of the ten core areas outlined in the budget, with many of the other areas of development also contributing to job creation.

In fact, the ‘four powerful engines’ identified for development are agriculture, MSME, investment, and exports, all of which by their very nature impact employment positively.

Agriculture

The budget addresses underemployment in agriculture through skilling, investment, and technology to foster enterprise development and job creation.

MSMEs

As per Udyam portal, there are about 5.9 crore MSMEs employing more than 25 crore workers. Of these over 1 crore registered MSMEs alone, employing 7.5 crore people are contributing to one-third of India’s manufacturing output.

All MSMEs will benefit from enhanced investment and turnover limits, allowing all of them to expend and create more jobs. Increased credit availability for micro and small enterprises, startups, and exporters will further drive employment growth.

Regulatory Reforms

The commitment to a light-touch regulatory framework and removal of outdated laws will improve ease of doing business, encouraging both domestic and foreign investment – leading to job growth.

Direct Tax Reforms for Employment & Investment

FM’s announcements on directly taxes aim to promote employment, investment, and ease of doing business, among other objectives. Key proposals include tax certainty for electronics manufacturing schemes, a tax scheme for inland vessels to enhance inland water transport, and support for start-ups. All major drivers of employment growth. Taxation certainty for Alternate Investment Funds (AIFs) and incentives for Sovereign and Pension Fund investments will strengthen infrastructure financing.

Given that construction is one of India’s largest employment sectors, these measures are expected to have a significant impact.