Being an Interim Budget for FY24-25, no major announcements or proposals were expected.  From this perspective, the speech was on the dot.  That way, no disappointment for any section is discernible.  Specific proposals for various industries and broader sections of the economy/society will be unveiled in the regular budget after the new Government is in place.


The biggest positive from the budget from a macro perspective is the fiscal path outlined by the Government.

The Finance Minister has adopted an aggressive fiscal consolidation target. She has announced an FY25 fiscal deficit target of 5.1% as against the expectation of 5.3% levels. In FY24 the fiscal deficit target of 5.8% has been achieved thanks to better revenue mobilization as against the target of 5.9%. The Govt has explicit target of 4.5% by FY 26

This also means Government’s borrowing is well contained at Rs. 14.13 lakh crores vs. Rs. 15 lakh crores that economists had expected.  Net borrowings are seen at Rs. 11.75 lakh crores. Besides, as the overall economic environment is turning towards lower finance costs, the ease of raising the funds should be quite high.

What makes the plan credible is that Fiscal deficit was only at 55% of annual target till end of Q3

On the other hand, net tax revenues for the April-December period were 17.30 trillion rupees, or about 74.2% of the annual estimate, compared with 15.56 trillion rupees in the same period last year.

OUR TAKE – It is very good news and though ambitious, seems possible to achieve the target taking into our growth rate and the huge tax buoyancy.   

Lower borrowings by the Government can lead to crowding in of the private players. 

The credible fiscal plan along with undershooting last year’s fiscal deficit can lead to RATING UPGRADE.

These are very positive for the Bond Market (yields to fall) and international investor flows.  


The Finance Minister that the government will help deserving sections of middle class to build their own houses.  Government to launch a scheme to help deserving sections of the middle class living in rented houses or slums or chawls and unauthorized colonies to buy or build their own houses.  

The government will build 20 million affordable houses in the next five years, to add to the 30 million houses built already.

OUR TAKE – The proposals are in line with the objective of inclusive growth


The government will invest significantly in the tourism sector in the country.  States will be encouraged to take up development of tourist centres and long term interest free loans will be provided for states

Government will launch a new scheme to strengthen deep tech for defence purposes.

The government plans to set up a Rs 1 lakh crore corpus to back innovation. This includes 50 year interest-free loan, long term financing or refinancing with long tenures with low or nil interest rates. The move is aimed at encouraging the private sector to scale up research and innovations. 

OUR TAKE – These are significant initiatives which will ensure long term development and self-reliance.


The outlay for infrastructure has been increased by 17% to Rs 11.11 lakh crore or 3.4% of GDP over the revised estimate of Rs 9.5 lakh crore in FY24. This is largely in line with expectations.

OUR TAKE – Higher employment and aiding growth through faster and easier mobility. Government has continued its focus seen for last several years with very good results.


What is the most surprising factor for many would have been the Finance Minister opting not to change any of the rates on Direct or Indirect taxes.  However, certain benefits to start-ups and tax exemptions to certain IFSC units expiring in March will be extended to March 2025.

OUR TAKE – This could have been anticipated in view of the fact that this is VOTE ON ACCOUNT and being an election year, it would raise political criticisms. 

However, as we move towards the elections, there can be some proposals that may be in pipeline to benefit the common man, particularly taking into account the high inflation.  

This is neutral for the markets.  

OVERALL, the budget should be well received by the financial markets.  Bond yields have already dropped by over 10 basis points from yesterday’s close (7.14% to 7.04% on the benchmark ten year bonds).  With positive implication for flows and possible Rating Upgrade, the Budget is RUPEE POSITIVE in medium term. 

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