The Union Budget 2025 has been recognized for striking a careful balance between fiscal consolidation and economic growth. Sagar Shah, Head of Domestic Markets at RBL Bank, highlighted the government’s commitment to maintaining fiscal discipline while boosting consumption and simplifying taxes.
“The budget continues on its roadmap of fiscal consolidation. The government walked the path of fiscal prudence and lowered next year’s fiscal deficit target to 4.4% from the current year’s 4.8% without losing focus on growth,” Shah stated. This reduction signals the government’s determination to manage public finances responsibly, even as it takes steps to stimulate the economy.
A key highlight of the budget, according to Shah, is its focus on consumption and tax simplifications. “Along with that, focus on consumption to promote growth and tax simplifications are the biggest highlights of this budget,” he said. The much-anticipated tax relief for the middle class, including the increase in the income tax exemption limit to ₹12 lakh, is expected to provide a significant boost to disposable income, thereby fueling consumption across various sectors.
Shah emphasized that the new tax code introduced in the budget addresses long-standing concerns of taxpayers. “Overall, a highly constructive budget with a new tax code will take care of the taxpayer’s concerns,” he noted. The simplification of tax structures is anticipated to enhance compliance, reduce administrative burdens, and create a more transparent taxation environment.
The Union Budget 2025’s combination of fiscal prudence, consumption-driven growth, and tax reforms positions India for sustained economic expansion while ensuring financial stability.
