Rajrishi Singhal: The budget touches but doesn’t feel and speaks but leaves much unsaid

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Subscribe to enjoy similar stories. Dispirited by an economic slowdown and stagnant spending power, observers greeted finance minister Nirmala Sitharaman’s beribboned tax breaks with a combination of euphoria and hope. There was elation because tax breaks could mean more money to spend and save; there are also expectations that this time will be different, because past experience shows that good budgetary intentions can be scotched by hidden small-print or an unexpected surge in inflation.

But disappointment lay elsewhere. The budget failed to go the distance in offering taxpayers long overdue justice by evening out the skewed power balance between individuals and the corporate sector. At the same time, it might be worth acknowledging that the near-universal appreciation of the budget’s generous overture to salaried income-tax payers is also leavened with some degree of scepticism.

This is because of its in-built limitations: it can perhaps reverse some of the stagnation in consumption, even while partially scoring some electoral goals in immediate elections, but does not seem designed to create a step-change in either consumption or financial savings. The reasons are simple. For one, part of the increase in disposable income is likely to be eroded by inflation.

Amid predictions of inflation easing over the next 12 months—Reserve Bank of India has forecast an inflation rate of 4.2% during 2025-26, with food prices settling in predictable territory—there are many disruptive variables that could upset projections. This includes extreme weather events. There are other unsettling elements in the price index.