Budget 2025: Tax benefits and AI adoption key for SME growth, experts say

Experts have suggested that the upcoming Union Budget 2025 should focus on promoting AI adoption and expanding credit access for small and medium enterprises (SMEs) to drive their growth. They also recommended tax benefits for businesses adopting emerging technologies like AI and the creation of dedicated manufacturing zones. Additionally, expanding credit guarantee schemes and using AI for credit assessments and risk profiling could streamline loan approvals and improve access to credit for SMEs.

What experts suggested for SME growth

Nitin Jain, co-founder of OfBusiness Group, stressed the need for SMEs to adopt AI and digital tools to boost productivity and stay competitive.

"The government should introduce tax benefits and subsidies to support this shift," Jain said in a statement to the Economic Times.

He noted that SMEs that contribute 30-35% to GDP and employ over 110 million people, require strong policy support to expand manufacturing and secure affordable credit. He also stated that the upcoming budget offers a key opportunity to drive this transformation through strategic interventions.

"Investing in digital upskilling, financial literacy, and AI-driven training programs will prepare SMEs for the evolving industrial landscape, ensuring a sustainable talent pipeline," Jain further added.

Dinesh Yadav, founder and managing director of Fine Acers also stated that the real estate and hospitality sectors anticipate key policy reforms in Budget 2025, which could greatly influence upcoming investment trends.

"Streamlining licensing and compliance processes would be instrumental in attracting substantial investments," Yadav said to ET.

He even explained that the sector is currently burdened by complex licensing requirements, multiple approvals, and high taxes, making hospitality investments less attractive—especially for capital-intensive projects with long gestation periods.

"A move towards single-window clearances would simplify business operations, reduce costs, and minimize delays," he added.