People from financial sector hailed the Union Budget and said it will boost long-term progress. The emphasis on inclusive development in the Union Budget is highly welcome, they said.
Stable economy
“Amid a global environment of rising uncertainty, the Union Budget is reassuring that our economy is stable and aligned towards long-term progress. Policymakers prudently unfurled a number of reforms aimed at increasing disposable income and reviving consumption in the Indian economy. Their prudence in balancing macro stability must be lauded as they have stuck to the fiscal prudence roadmap by setting a fiscal deficit target of 4.4% for Financial Year 2026 (FY26) while also spurring consumption,” said Vinod Francis, GM-Chief Financial Officer, South Indian Bank.
Moreover, the government allocating a Capex of ₹11.21 lakh crore for FY26 in the most productive sectors of the economy would likely have a domino effect and accelerate capital formation in the economy, he said.
“We second the government’s recognition of MSMEs being the second engine driving India’s manufacturing growth. The decision of allotting ₹1.5 lakh crore would further spur capacity expansion, creating a ripple effect that would have a positive effect on growth, aiding India’s development,” he added.
Inclusive development
The Union Finance Minister’s emphasis on inclusive development in the Budget similar to the government’s focus clearly articulating ‘inclusivity’ as the guiding principle is highly welcome, said K. Paul Thomas, MD & CEO, ESAF Small Finance Bank.
“Initiatives such as the Grameen Credit Score, the enhancement of the Kisan Credit Cards (KCC) loan limit from ₹3 lakh to ₹5 lakh, and the introduction of credit cards for micro enterprises are key announcements that advance the cause of inclusivity. Digital public infrastructure receives a boost with the announcement of ‘BharatTradeNet’ (BTN) for international trade, which will serve as a unified platform for trade documentation and financing solutions, along with a revamped Central KYC Registry.”
The exemption of income tax on annual incomes up to ₹12 lakh is a significant benefit, empowering middle-income households and boosting disposable income in both urban and rural markets. Therefore, the Budget not only sustains the current economic growth, but also lays a strong foundation for future growth and development, he added.
Economic sense
“As Prime Minister Narendra Modi wished, Goddess Lakshmi has blessed the middle class, with Union Finance Minister Nirmala Sitharaman announcing a large-sized tax relief for this burgeoning population segment in the Budget. The income tax exemption up to ₹12 lakh per annum makes immense economic sense. The tax reduction will put significant amounts of money into the hands of the middle class, whose propensity to consume and save is very high. This will boost private final consumption and household savings considerably, which in turn will add to economic momentum. It must be remembered that the shrinking Private Final Consumption Expenditure was the main factor behind the moderation in economic growth in the recent months,” said V. P Nandakumar, MD and CEO, Manappuram Finance Ltd.
Published – February 02, 2025 08:09 pm IST