Budget Strikes a Balance: Growth vs Fiscal Stability

Budget 2025 has achieved a delicate balance through smart allocation of all resources

- Radhika Gupta

Budget 2025 has moved in a path that at once caters to the immediate requirements of the economy, while continuing on the path to investing for future growth, even while ensuring a tight leash on the fiscal deficit.

Tax slab rationalisation to boost consumption, ease of taxation via higher thresholds for tax deductions (TDS and TCS), tax clarity on ULIP investments, and tax-free withdrawals from NSS investments give the middle class much to cheer about.

At the other end of the spectrum, continuing spends on infrastructure via steady capex outlay, lower-than-expected fiscal deficit, and a nearly unchanged market borrowing programme ensure that the macros are in healthy shape, eventually translating to lower borrowing costs for the government.

The budget projection for a 6.3-6.8% gross domestic product (GDP) growth in FY26 would place India among the fastest growing large economies in the world.

Considerable tax relief