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The most striking features of this Budget was its focus on simplification and improving the ease of doing business in India, asserts Kaku Nakhate.
The Budget is fiscally prudent, prioritises consumption, provides for capex, and focuses on job creation -- much needed elements for Viksit Bharat.
The Budget brought a lot of cheer to the middle class as the finance minister announced no tax on annual income of up to Rs 12 lakh.
The move will put a staggering Rs 1 trillion in the hands of the middle class, boosting consumption amidst stagnating wage growth, as flagged in the latest Economic Survey. This is a monumental step.
In an uncertain global economic environment, it is reassuring to see that the fiscal deficit will reduce to 4.4 per cent in FY26 from 4.8 per cent in FY25.
With the nominal GDP expected to grow at 10.1 per cent in FY26, India will continue to remain the fastest growing major economy and become the world's third largest by the end of this decade.
Overall, the Budget is inclusive, creates jobs by supporting sectors like agriculture and MSME.
It promoted employment and entrepreneurship opportunities in labour-intensive sectors like footwear, leather, textile, and tourism.
The proposed National Manufacturing Mission for small, medium, and large industries and the focus on developing an indigenous toy industry are the right steps and will further stimulate the government's 'Make in India' initiative.
The reduction on import duty on open cells and lithium ion batteries will boost domestic manufacturing in sectors like electronic goods, mobile phones, EV batteries, and electrolysers.
Given India's population of 1.4 billion, we need to be self-sufficient in agriculture.
The proposed National Mission for edible oil, a six-year Mission for Aatmanirbharta in pulses, comprehensive programmes for vegetables and fruits are welcome moves for a healthier and young India.
Our MSME sector is the backbone of our country, employing 75 million individuals, generating 36 per cent of India's manufacturing and accounting for 45 per cent of exports.
To support the sector, the credit guarantee cover has been doubled, which will improve credit access for 10 million MSMEs.
Also, the startups will benefit from increased credit limits, while the new Fund of Funds for startups will help entrepreneurs grow their business.
Several measures were announced for the healthcare sector ranging from expansion of medical education, development of day-care cancer centres in all district hospitals, relief on import of drugs and medicines.
The decision to raise the FDI limit for the insurance sector to 100 per cent from present 74 per cent has long-term benefits and will increase the penetration of insurance in the country.
Surely, this will encourage M&A activities in the sector.
Given the importance of logistics, mobility and tourism for the economy, the government has further announced 120 new destinations under the UDAN scheme and 50 new tourist destinations.
As a result, the number of airports in the country will quadruple since 2014.
In order to attract and promote more activities in the IFSC GIFT City, specific tax benefits have been proposed for ship-leasing units, insurance offices, treasury centres of global companies, and AIFs undertaking investments in infrastructure.
Finally, the most striking features of this Budget was its focus on simplification and improving the ease of doing business in India.
Many of the benefits have been extended for a period of five years to 2030, providing tax certainty for businesses.
To encourage more multinationals to come to India, this Budget streamlined the process of transfer pricing, providing stability of taxation of three years.
This will be in line with global best practices.
Further, with a view to reduce litigation and provide certainty in international taxation, the scope of safe harbour rules is also being expanded, which was a long pending demand of the industry.
Kaku Nakhate is president and India country executive, Bank of America.
Feature Presentation: Aslam Hunani/Rediff.com
