HT Bureau
GUWAHATI, Feb 1: Union Budget 2025 is likely to spur consumer demand and savings by the middle class that has faced challenges from elevated inflation and lower income growth, said Sakshi Gupta, principal economist, HDFC Bank.
She said that addressing concerns around slowing demand from the middle class, the budget rationalised personal income tax slabs across the board along with revision in the limits of the tax deducted at source.
“Beyond the sops for the common man, the budget focusses on improving the ease of doing business through a “light touch” regulatory approach. The next five-year fiscal strategy has been geared towards promoting agriculture, MSMEs, exports and promoting greater participation from the private sector in India’s capacity building going forward,” she added.
The FM’s fiscal strategy has tilted towards boosting consumption while the capex target has been kept broadly unchanged from the 2024-25 budgeted plans, she said.
Gupta also said that the counter-cyclical push provided by the budget is within its broader strategy of fiscal consolidation, targeting a fiscal deficit of 4.4% in 2025-26, adding, “Despite the revenue foregone due to the income tax changes, fiscal consolidation is achieved through compression on the expenditure side in 2025-26”.
“Today’s budget announcement solidifies our expectation of 6.6% of GDP growth in 2025-26,” she concluded.