Budget bang on target with growth push, fiscal discipline: Nilesh Shah
fiscal discipline and much-needed growth support through targeted measures. The major highlights of this year's budget were direct tax cuts and rationalisation of tax slabs, measures that would benefit middle class households.
This year's budget aligns closely with previous budget themes, presenting no major surprises in fiscal calculations. The themes of conservatism and consolidation remain prominent. As anticipated, the government is targeting a fiscal deficit of 4.4% of GDP in FY26. This move is seen as essential for consolidating the fiscal health while avoiding excessive borrowing that could lead to inflationary pressures. This reflects the government's intent to reduce its reliance on debt, which will have a positive effect on long-term economic stability. A key question was whether consolidation would come from revenue or capital expenditure. The budget indicates that the government plans to primarily restrain non-capital expenditure, which is a very positive development.
There was a visible shift in tilt towards supporting consumption through lower taxes on middle class households, relative to the public capex-driven growth push witnessed over the past few years. Through this budget, the consumption story gets the much-needed push, while the capex story continues broadly as earlier.
This shift also takes into account the need to support private consumption this year, given the weakness in consumption trends across multiple segments.
We have seen a well-coordinated fiscal and monetary response to
