FM throws a party for aam aadmi

THE GOVERNMENT CHOSE to move to debt reduction as the core fiscal strategy, foregoing rigid annual deficit targets, and set an aim to reduce the ratio of the central government debt to GDP to 50% by FY31, from the FY25 level of 57%.

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This compares with a goal of 40% set by an expert panel earlier. The shift in fiscal strategy could provide considerable operational flexibility for the Centre through Modi 3.0 government's tenure. While high economic growth and resultant revenue buoyancy are potential upsides to the plan, the inadequacy of these could throw up as risks. To be sure, the three scenarios of nominal GDP growth rates—10%, 10.5% and 11%—foreseen in the fiscal policy statement seem realistic.

The Budget was vocal about "transformative reforms" to be undertaken to bolster the economy's growth potential, and the Viksit Bharat vision for 2047. It identified six domains in particular for the reforms—taxation, power sector, urban development, mining, financial sector, and regulatory reforms.