The Finance Minister’s Budget speech was short, crisp and visionary. The inclusion of environmental sustainability was indicative of India’s far-sighted approach to save future generations from the menace of climate change.
Allocations for various sectors showed a balanced distribution of funds eschewing populist expectations.
She spoke with conviction and mental coolness. When a slip of tongue occurred, she overcame the embarrassment elegantly with a smile. With this Budget she has established her own identity as a competent minister.
The $5-trillion path
The Budget was suave wherein the tapestry of future schemes and intent were woven to splash vignettes of a $5-trillion economy. That said, despite a higher capital allocation the Budget still intends to cap its market borrowings to aim at a sub-6 per cent fiscal deficit as it counts on lesser subsidy outflow in agro sector.
The markets were appropriately enthused. In its purposeful nudge away from old tax regime, the government by retaining conservative exemption thresholds, has dismayed quite a few consumption based sectors. For insurance business, which was flourishing post Covid, this was poor tidings. Indices dipped too on lack of a benign eye on capital gains. The absence of a rebound even later, indicates that the fine print too has little to offer. Rationalisation of personal income slabs and enhanced deductions come as a relief to lower income tax payers. Budgets leaning more to growth and higher consumption carry a time lag for sustained job addition and income upswing. Yet allocation to rural jobs have been cut a third and food assistance reduced and the government needs to revisit these allocations.
Capex thrust welcome
The Budget with its well thought out capex allocations will not only help propel the economic growth, but would also encourage domestic private capital investments.
While the hike in the income limit for IT payers could be construed as a sop for middle classes, the fact is that it has been long awaited by the salaried class. The schemes meant for other sections like women, artisans, MSMEs are very much welcome.
However, the sharp reduction in allocation for MGNREGA scheme is a big dampener and would impact rural employment.
In the wake of the Hindenburg Research report, Adani Group had called off its FPO (follow-on public offer) despite it being fully subscribed.
While the Adani Group had attributed its decision to call off FPO to protecting its investors, it is clear that it is being done to limit the further damage to its rapid slide in its market capitalisation.
Since the Hindenburg Research report appeared, the Adani Group companies have lost market capitalisation of over ₹7-lakh crore. Unless the Adani Group addresses the issues raised by the Hindenburg report, it could hardly be business as usual for the conglomerate.