The Finance Minister has delivered a well-rounded budget that carefully blends populist and capitalist elements. Notably, the budget makes significant strides towards simplifying the tax system, reducing tax, a move likely to stimulate consumption. The reduction in personal income tax is poised to leave an additional 1 lakh crore in disposable income for the middle class. This substantial financial relief will undoubtedly boost consumer spending.
Efforts to improve the ease of doing business are evident, with measures including the rationalisation of TDS (tax deducted at source) & TCS (tax collected at source), as well as the decriminalisation of certain business laws. These changes are expected to create a more business-friendly environment across India.
The budget has also placed a strong emphasis on supporting MSMEs and startups. The launch of an export promotion mission aimed at facilitating export credit, supporting cross-border factoring, and helping MSMEs navigate non-tariff measures in export markets is a strategic move to enhance India’s export capabilities.
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In terms of fiscal management, the budget aligns well with expectations, adhering to fiscal prudence, which is commendable. While the markets might have anticipated a more relaxed fiscal approach, the current stance is satisfactory.
Infrastructure seeding, however, remains flat year-on-year with a capex of Rs 11.2 lakh crore, the same as in FY25. This stability in capex is notable, especially considering the budgetary adjustments made last year due to election uncertainties. For FY26, the government plans an 11% increase in spending to Rs 10.1 lakh crore, reflecting a cautious but optimistic investment in infrastructure development.
Overall, the Union Budget 2025 is good budget, aiming to stimulate economic growth while ensuring fiscal health during Amritkaal period. It encompasses substantial measures to support key industries and the wider economy, positioning India as a Viksit Bharat by 2047.
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