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BIG BOOST FOR CONSUMPTION WITH PRUDENCE

India Today

17th February, 2025

The Board of India Today Experts (BITE) gives a thumbs up to Budget 2025 for striking a fine balance between economic growth and fiscal prudence but cautions that it rides on fulfilling commitments, including reducing regulatory hurdles and implementing next-gen reforms

Q HOW DO YOU RATE THE UNION BUDGET? CAN IT HELP ACCELERATE GDP GROWTH TO OVER 8 PER CENT?

DHARMAKIRTI JOSHI: The budget aims to strike a balance between investment and consumption. We expect GDP growth of 6.5 per cent next fiscal. If implemented effectively, the budgetary measures can enhance growth potential. First, the government should ensure that the committed capex is executed, minimising cost and time overruns. Second, prioritising ease of doing business and reducing regulatory hurdles are essential to invigorate the private corporate sector, which has greater financial flexibility for fixed investments. However, the wild card is global turbulence resulting from escalating tariff wars, which will require deft policy and diplomatic efforts to navigate.

ASHIMA GOYAL: I would give it 9/10. It can help accelerate growth, but for growth to reach 8 per cent, other policies also have to contribute. For example, the real repo rate must not be above 1 per cent in terms of expected inflation. But the budget's conservatism and proposed action on enabling vegetable supply should give the MPC [Monetary Policy Committee of the Reserve Bank of India confidence to bring down rates.

SAMIRAN CHAKRABORTY: The immediate objective of the budget was to give a policy nudge to nearterm growth and maintaining the fiscal consolidation roadmap. The immediate growth nudge has come from a larger-than-expected reduction in personal income tax liabilities which is likely to spur consumption while the fiscal deficit projection at an even lower than earlier promised 4.5 per cent of the GDP would improve the credibility of the fiscal consolidation process and preserve macro-stability. The medium-term structural growth outlook would benefit from the seeds sown in the budget of further deregulation, MSME focus and export facilitation.