A balanced budget

By Tirthankar Patnayak

: Strikes a balance between economic growth, fiscal consolidation, and social well-being with reforms across six key sectors—taxation, power, urban development, mining, financial sector, and regulatory frameworks.

v  Enhanced spending power of middle class: No tax for income up to Rs 12 lakh (addl. Rs 0.75 lakh for salaried employees), boosting household consumption, savings and investments; wider tax slabs for all tax-payers.

v  Growth engines: Agriculture, MSMEs, investments, and exports positioned as major growth engines. Enhanced credit access for MSMEs and start-ups, support for exports, labour-intensive sectors, and clean-tech manufacturing, along with interest-free loans to states, will help sustain India’s status as the fastest-growing major economy.

v  Ease of doing business: Simplification of regulatory framework, rationalisation of tax regime to further reduce compliance burden and litigation, enhancement in FDI limit in insurance to 100%, fast-track merger approvals, and trust-based economic governance

v  Impetus to social and infra capex: Capex budgeted to increase by 10% to Rs 11.2 lakh crore, focusing on roads, railways, housing, and defence. A slew of steps taken to invest in India’s most valuable asset—its people—including strengthened social security for gig workers, increased credit for the self-employed, urban worker upliftment, and term loans for first-time women entrepreneurs.

v  Fiscal prudence with clear roadmap: Fiscal deficit targeted at 4.4% of GDP for FY26, with FRBM guidelines outlining a consolidation path to reduce debt-to-GDP to around 50% by 2031 (from 55% currently), supporting long-term macroeconomic stability and credit rating improvement.

v  Funding mix: Market borrowings (gross: Rs 14.8 lakh crore) to fund 73.5% of the deficit, with 21.9% funded by small savings.

Tirthankar Patnaik, PhD

Chief Economist

National Stock Exchange of India Limited (NSE)