For her eighth consecutive budget, Finance Minister Nirmala Sitharaman struck a populist tone, offering tax cuts, sectoral incentives and ambitious growth targets. Yet, as with all budgets, execution will determine whether these proposals translate into tangible gains. India has seen its share of grand announcements, only for bureaucratic inertia to stall their impact. This year must be different. The government must swiftly implement its pledges, ensuring they do not remain mere aspirations.
The budget’s most talked-about feature is the massive relief for taxpayers. The middle class, long grumbling about its tax burden, received a windfall with the tax rebate threshold was raised from Rs. 7 lakh to Rs. 12 lakh. The highest tax rate of 30 percent now kicks in only after Rs 24 lakh. The move leaves more disposable income in the hands of consumers. The government is betting that this will spur consumption and private-sector investment, reigniting economic activity.
However, the gamble is not without risks. The Rs. 1 lakh crore in foregone tax revenue risks straining public finances even as the government targets a 4.4 percent fiscal deficit in 2025-26. The feasibility of achieving this target while expanding social-sector schemes remains to be seen. Much will depend on whether tax relief truly stimulates growth.
Beyond tax cuts, the budget focuses on self-reliance. The National Mission for Edible Oilseeds seeks to achieve independence in pulses over six years, targeting crops like tur, urad and masur dal. The move is pragmatic as India remains heavily dependent on imports for its oilseed requirements. A more resilient domestic supply chain will insulate the country from global price shocks. Yet success will depend on whether central agencies such as NAFED and NCCF efficiently procure and distribute produce, preventing the kind of bureaucratic bottlenecks that have hampered past agricultural reforms.
Politics, too, played its part. Bihar, which heads to the polls later this year, has received a generous allocation. Meanwhile, Andhra Pradesh, a key NDA ally, finds itself largely ignored. The opposition has been quick to seize upon this, questioning whether fiscal policy is being used to reward electoral loyalty.
The budget signals a shift in capital expenditure, missing projections by Rs. 1 lakh crore. Despite historically high allocations, the slowdown is concerning, as infrastructure investment drives jobs and growth. The government must prevent this dip from stalling economic momentum.
There is, however, a welcome shift towards employment generation. The Production Linked Incentive (PLI) scheme, which previously favoured capital-intensive industries, is now supplemented by incentives for labour-intensive sectors such as textiles and leather.
Looking ahead, much will hinge on how effectively these policies are implemented. India’s economic survey envisions 8 percent growth annually to achieve ‘Viksit Bharat’ by 2047. The finance minister’s task does not end with presenting a well-crafted budget. The government must now ensure that promises translate into real benefits. Delays in execution will mean lost opportunities, and India, poised for high growth, can ill afford them. Speed matters.
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