A fine balance or a big boost to spending, call it by any name but the Budget for FY26 is a clear call by the Finance Minister emphasising on reviving core sectors like agriculture, MSMEs, affordable housing, promoting manufacturing, boosting spending and at the same time putting in more.

Most economists pointed out that given the soft domestic growth and uncertain global environment (potential tariff risks under Trump 2:0), the Budget made an effort to lay down laid down the economic framework to boost India’s medium-term growth with focus on improving ease of doing business, deregulation among others.

Budget a balancing act

Tanvee Gupta Jain, Chief India Economist at UBS Securities refers to the Budget as “a balancing act to address softer growth and ensure macro stability. Incorporating today’s fiscal announcement and recent measures by the RBI to ease inter-bank liquidity deficit, likely shallow monetary easing, inclination towards greater exchange rate flexibility and focus on persistent structural reforms, should help to boost India’s growth towards 6.5%YoY in FY26/27.”

Ravi Kumar Jha, MD & CEO at LIC Mutual Fund AMC added, “Overall, it is a good and positive Budget, which gives equal thrust on rural economy, manufacturing, exports and economic reforms. Another major decision in the BFSI sector is allowing 100% FDI in the insurance sector. Further, the government’s continued focus on ‘Ease of Doing Business’ customs duty cuts, and overhauling of the regulatory mechanisms is commendable. The Budget has a clear focus on boosting consumption and energizing the rural economy. Providing significant personal income tax relief to middle-class taxpayers and additional exemptions to senior citizens will give a fillip to the economy and promote consumption.”

Budget a positive for medium-term

Anurag Mittal, Head of Fixed Income at UTI AMC pointed out that, “The budget continued the path of inclusive development by boosting personal spending while continuing the trajectory of fiscal consolidation. The borrowing number is marginally higher than bond market expectations as Government has not kept any short-term borrowings. This is more positive for short to medium end of the yield curve. The road map of debt/gdp to 50% by 2031 is positive from a medium-term structural perspective.”

Overall, the Budget is expected to boost the economic revival at the grassroots level. given the slowing pace of consumption in the rural as well as urban landscapes.