The Budget aims to accelerate economic growth, boost private sector investments, uplift household sentiments and enhance middle class spending power. All this in India’s march towards Viksit Bharat by focusing on high quality education, affordable healthcare, increasing women workforce and making India a global manufacturing and food hub, in addition to services for which it is known.

The key engines of growth outlined were agriculture, MSMEs, investments and exports with reforms as the growth fuel for powering these engines.

In agriculture the focus was enhancing productivity, improving flow of credit to farmers through Kisan Credit Cards, increasing warehouse capacity for storage of fruits, vegetables and other agri produce, Atmanirbhar in pulses production, and services to expand inclusion in rural India. Similarly, to reduce rural migration, States are being encouraged to resolve under-employment through skilling, investment and technology.

For MSMEs the reclassification by way of higher turnover and investment limits would bring more forms into the definition and thus benefits. Budgets made provisions for higher credit flow, guarantees, support for start-ups, credit card for micro enterprises and increased focus on labour intensive industries.

At the moment, there are over a crore registered MSMEs, employing 7.5 crore people, accounting for 45 per cent of our exports and generating 36 per cent of India’s manufacturing capacity. Any improvement in this segment would directly lift the GDP growth, as was seen in countries like China and Vietnam.

Under investment, many schemes were announced for education and skilling, healthcare, infrastructure development, including incentives for States, energy sector, particularly nuclear energy, and focus on urban development

The focus on boosting exports and integrating the Indian economy with global supply chains through steps like Export Promotion Mission, digital infrastructure called ‘Bharat Trade Net’, and greater push to domestic manufacturing are vital at a time when large economies are realigning their trade priorities. To sustain our edge, India needs to create capacities in automation, invest in AI, and a highly skilled workforce. Thus, the support to hi-tech industries is the way to go forward to make a mark in the Industry 4.0 era.

One of the biggest measures announced was personal income tax rationalisation which will put over ₹1 lakh crore in the hands of the middle class and salaried employees across the income bank. This will likely boost consumption, savings and investment – all of which are much needed for economic growth.

Impressively, despite the above and core sector allocations, the fiscal consolidation map remains highly favourable; 4.8 per cent for FY25 and 4.4 per cent for FY26. But the attempt to refine the process seemed far more commendable. Asking each ministry to come up with a three-year pipeline of projects through PPP route and permitting States to seek loan support from India Infrastructure Project Development Fund will certainly ensure clarity, compliance and objectivity.

In fact, the FM made it amply clear that not everything is about allocating more funds. In that sense, the thrust on ease of doing business and ease of tax compliance is very forward looking. For example, some of the steps taken to reduce compliance burdens may be seen as insignificant, but these are welcome steps to remove persisting irritants for a tax payer.

Let me conclude with a popular quote from the former US President, Barack Obama who once famously said: “I am a warrior for the middle class.” For India’s vast 430 million-plus middle class, Nirmala Sitharama has just earned that title.

Related Topics