A striking achievement highlighted in this budget is the reduction in fiscal deficit. In just two years, India has slashed its deficit from 6.7% to a very manageable 4.9% of GDP, which is further expected to drop to 4.5% by next year. This fiscal discipline has been achieved through prudent spending, enhanced revenue mobilisation and targeted fiscal measures. It is also directly linked to the increased investor confidence, enabling more funds to flow into critical areas like infrastructure and social programmes.
Tax collections, increased by 18%, have also been impressive. This is a direct result of the successful implementation of GST and improved tax compliance. It provides GoI with the necessary fiscal space to invest in critical areas like healthcare, education and infra without resorting to excessive borrowing. This holistic approach ensures that the benefits of increased revenue are channelled into areas that promote long-term economic stability and growth, with social programmes being a primary area.
Social progress is also evident in the strides made in poverty alleviation. Over the past decade, more than 248 mn Indians have been lifted above the poverty line, underscoring the impact of inclusive growth policies. Targeted programmes like PM-KISAN and Ayushman Bharat have been instrumental in improving the quality of life for millions. These social programmes are directly supported by the increased fiscal space created through enhanced tax collections, creating a virtuous cycle of growth and social uplift.
While the last decade has been about poverty alleviation, the next decade will be about economic prosperity. One of the most transformative measures in the budget is its emphasis on employment and skilling. The new employment-linked incentives (ELI) highlights this ideological and structural shift by encouraging growth of SMEs. A record allocation of ₹2 lakh cr on upskilling 4 crore young Indians will ensure we develop a robust talent pipeline to fulfil our manufacturing aspirations. Additionally, offering internships at top companies for 1 cr youngsters will open doors to invaluable experiences and opportunities.
All nations that have achieved ‘developed’ economy status have done so on the back of infrastructure build-outs, the Chinese having exemplified this well over the past five decades. GoI’s massive investments in infra have been a cornerstone of India’s growth strategy. Allocation for infra spending of ₹11.11 lakh cr, marking an 11% increase from the previous year and constituting 3.4% of GDP, is remarkable. (The US spends close to 2.5% and China almost 5% of their GDP on infra.)From highways, railways and ports to urban development and digital connectivity, these projects have not only created jobs and boosted productivity but also enhanced the overall business environment. This budget’s continued commitment to infra development, through initiatives like the National Infrastructure Pipeline (NIP) and Gati Shakti, promises to further strengthen India’s position as a global manufacturing and logistics hub.While we invest trillions into infra development, our infrastructure must embrace digitalisation, decarbonisation and climate resilience, with a focus on quality. We need to have better clarity of utilisation and service delivery levels of our assets to drive further decisions. We also need to move beyond both conventional and ongoing digital infrastructure focus to new avenues such as AI, EV-charging, space infrastructure, etc. Private sector partnerships will be vital in achieving these objectives by bridging the financing gap, fostering innovation and increasing efficiency in project execution.
While the global economic landscape remains uncertain, India’s latest budget exudes confidence and optimism. It’s not just a financial statement but also a blueprint for India to fulfil its potential as a global economic powerhouse.