Budget 2025: A Boost for the Franchise Industry

FM Nirmala Sitharaman’s Budget 2025 is purely a boost for the franchise fraternity and brings forth several key policy measures aimed at fostering growth in the franchise sector, supporting small businesses, and boosting entrepreneurship. With enhanced credit access, support for startups, increased foreign investment, and tourism infrastructure development, the budget presents significant opportunities for franchise businesses across multiple industries.

Franchise businesses are poised for growth following the pro-entrepreneurship stance of Budget 2025. With dedicated support for MSMEs, startup funding, and economic reforms that foster a business-friendly environment, the budget lays the groundwork for expansion in sectors like retail, F&B, healthcare, and more.

Highlights for franchise Industry

Simplified Credit Access for MSMEs
To support small businesses, the government has raised investment and turnover thresholds for MSMEs, easing the process of obtaining financing for both franchisees and franchisors. This initiative is set to drive expansion and attract more entrepreneurs to the franchise industry.

Emphasizing the significance of enhanced credit access for individuals and businesses, Satyam Kumar, CEO and Co-founder, LoanTap, shared his insights on the government’s move:

"Credit on UPI directive for offering loans and limits up to Rs 30,000 is a big budget initiative that will include urban and poor populations in the credit ecosystem, much like the Kisan Credit Card does for agriculture. The MSME sector, being India’s largest employer, has faced significant lender tightening post-COVID. The enhanced credit guarantee scheme will provide much-needed relief. Additionally, tax breaks for individuals will significantly boost domestic consumption and fuel GDP growth. As a fintech leader, we are excited about the future and look forward to working alongside the government in building a ‘Viksit Bharat’.”

Key points announced by FM for MSMEs:

• For micro enterprises, the MSME credit guarantee cover will be doubled from Rs 5 crore to Rs 10 crore, leading to additional Rs 1.5 lakh crore credit in the next five years.
• Customised credit cards with a limit of Rs 5 lakh will be launched for small businesses registered on the Udyam Portal.
• For startups, from Rs 10 crore to Rs 20 crore with the guarantee fee being moderated to 1% for loans in 27 focus sectors which are important for Aatmanirbhar Bharat.
• Investment limit for MSME classification to be made 2.5 times and the turnover limits for the MSME classification will also be doubled.

Booster Budget 2025: Fueling India’s Startup Ecosystem

A ₹10,000 crore fund has been allocated to promote entrepreneurship, with a focus on first-time business owners, women entrepreneurs, and underrepresented communities. Additionally, term loans of up to ₹2 crore will be made available under this scheme, offering franchise startups a strong financial foundation.

Support for Women Entrepreneurs: Loans Up to ₹2 Crore
In a significant move to promote financial inclusion and women empowerment, the government has introduced a new scheme for first-time SC/ST women entrepreneurs. This initiative offers term loans of up to ₹2 crore over the next five years, further strengthening the success of the Stand Up India program, which has been instrumental in fostering women-led businesses

 Increased FDI in the Insurance Sector

The government has raised the FDI cap in insurance from 74% to 100%, provided companies reinvest the entire premium in India. This move is set to attract more global insurers and create new business opportunities for franchisees in the financial services sector.

Investment in Tourism Infrastructure

The budget includes a plan to enhance infrastructure in India’s top 50 tourist destinations, with hospitality businesses in these locations receiving special incentives. This initiative will likely benefit hotel and food-service franchises, providing a boost to the hospitality industry.

A Bold Vision for India’s Logistics Sector

The budget’s emphasis on logistics infrastructure, AI-driven solutions, and public-private partnerships has been widely appreciated. Pali Tripathi, CEO, Taabi Mobility Limited (RPG Group), outlined how these measures will redefine India’s logistics landscape:

"The Union Budget 2025-26 lays a strong foundation for transforming India’s logistics sector through a powerful combination of MSME support, innovation, and public-private partnerships. The enhanced credit guarantees and infrastructure investments will accelerate the adoption of AI-driven logistics solutions, improving efficiency and reducing costs for businesses nationwide.

The transformation of India Post into a large-scale logistics network, along with greater accessibility to PM Gati Shakti data for the private sector, will significantly enhance connectivity, particularly in hinterland regions. These initiatives will drive smarter freight management, optimize last-mile delivery, and make transportation more seamless and sustainable.

Additionally, the government’s focus on infrastructure upgradation in air cargo and warehousing will streamline multimodal logistics, reducing transit times and improving supply chain resilience. The inclusion of gig workers in social security schemes, with ID registration on the e-Shram portal and health coverage under PM Jan Arogya Yojana, is a commendable step in recognizing their crucial role in keeping India moving.

 With these strategic initiatives, Budget 2025 lays the groundwork for sustained growth in the franchise industry. By improving credit accessibility, supporting startups, attracting foreign investments, and enhancing tourism infrastructure, the government is reinforcing its commitment to empowering small businesses and entrepreneurs in India.