By Navneet Munot
This year’s budget reinforces India’s position as a strong anchor amidst the rough seas of tariffs and geopolitical uncertainty. Fiscal prudence has guided the government’s policymaking, along with relentless focus on structural reforms.
Recently, government finances have been augmented by “3Ds” of—Digitalisation— which helped rapid formalisation of Indian economy and greater tax compliance, Direct Benefit Transfer (DBT) architecture—plugging leakages and improving last-mile delivery and higher Dividends from the RBI and PSUs.
The next big lever could be disinvestment/asset-monetisation. In this regard, it’s heartening to see 137% increase in disinvestment projections and a proposal for land monetisation through REITs by PSUs.
Building on substantial tax reforms in the Goods and Services Tax (GST), corporate tax and personal income-tax, this Budget carried on with this trend by rationalising customs duties.
This, along with continued investments in infrastructure and focus on ease of doing business with measures such as labour reforms and withdrawal of quality control orders, will help in building supply chain resilience and make India’s manufacturing more competitive.
Strategic Sector Focus
The government’s focus on seven strategic and frontier sectors in this Budget recognises the changing reality of today’s modern and hi-tech economy as well as strategic imperatives. Beneath all the noise on global frictions and geopolitical tensions, a powerful global investment cycle is underway, marked by significant spending on defence, climate transition, supply-chain re-alignments, and spending on artificial intelligence infrastructure.
Well-calibrated policies and timely execution can help India integrate into these global investment themes, capture emerging opportunities and enhance economic and market resilience over the medium to long term.
With a couple of key trade deals in the bag, reform measures and India’s inherent strengths with its democracy and demography, it has a real potential to become a trustworthy and reliable farm, factory, and front office of the world.
The latest Budget reinforces this strategic direction, signalling a determined push to position India not only as a stronger economic powerhouse but also as a more influential soft power on the global stage.
Improving Quality Life
The government over the past decade has tried to ensure that economic progress translates into tangible improvements in the quality of life for citizens across all strata. This year’s Economic Survey has brilliantly outlined a roadmap for India’s economic trajectory while stating that medium-term potential growth rate has moved up to 7% from 6.5% earlier.
I think our aspirations must be higher to reap the true potential of a once in a generation demographic dividend. In this regard, the government’s focus on skill development and job creation in sectors such as tourism and creative economy is welcome.
Uncertain global environment and massive Chinese overcapacity pose fresh challenges, and India must stay vigilant.
The government has made sure that the reform train chugs along throughout the year rather than having only one stop that is the annual Budget.
Yet, this year’s Budget has done its part—strengthening fundamentals, sustaining reform momentum, and laying out a credible platform for long-term growth. The mantle now passes firmly to the private sector to step up, invest, and drive the next leg of India’s expansion.
(The author is MD & CEO at HDFC AMC)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.