INDUSTRY HAILS INFRA PUSH, RAIL CORRIDORS, ECONOMISTS LAUD LOWER FISCAL DEFICIT TARGET, RURAL FOCUS

The gross market borrowing for FY25 at Rs 14.13 lakh crore and net market borrowing at 11.75 lakh crore, according to Rajesh Sinha, Senior Research Analyst of Bonanza Portfolio, can be a positive for public sector banks

- NIVEDITA MUKHERJEE

The Interim Budget has drawn a wide range of opinion from industry and analysts cheering the reduction in the fiscal deficit target at 5.1 per cent of GDP for FY25 and downward revision of the fiscal deficit target for FY24 to 5.8 per cent from 5.9 per cent of GDP. The view is that this has potential for lower interest rates due to a larger-than anticipated decrease in fiscal deficit, enhancing the overall macroeconomic stability. For industry, the Finance Minister Nirmala Sitharaman’s announcement of three major railway corridors and dedicated economic rail corridors for specific commodities showcases a proactive approach to tackling logistics bottlenecks.

Dipti Deshpande, Principal Economist, CRISIL highlights a lower fiscal deficit hinging on moderation in revenue spend and realistic GDP growth and tax collection assumptions.

The Budget relies on a mix of capex and rural spends to bolster growth, according to Deshpande who notes that growth in capex is slower, but its share in GDP is higher on-year, suggesting continued dominant role of government investment.