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Thoughts on the recent Union Budget and aftermath

 My first thoughts on the Union Budget are positive:-

1)The Fiscal deficit glide path adhered to is good for the economy interms of containing inflationary pressures and also give macro economic stability in the medium terms which will reassure all the Global Ratings Agencies for a possible Sovereign Ratings upgrade.This will moderate Interest rate which is positive for Private Capex investments to pickup.

2)The medium term reduction plan of Debt to GDP bringing it down to close to 50% by 2030 shifts focus from Fiscal deficit reduction to Debt to GDP in a significant manner

3)Certainly Acche Dhin AAA(Triple A) Gaya for Indian middleclass- despite Dil Maange More , one should admit honestly that in one stroke FM Nirmala Sitaraman has both made life easy and also made filing ITR easy for them. 

Inflation itself is a form of Taxation on the poor and for the middle class for whom Marginal Utility of Money is high, even one Rupee relief by way of Tax reduction will boost their spending propensity. Simple theory which puts more money in the hands of women belonging to Middle class will mean additional disposable income for Consumption to increase.

4) Allocation for Capex for Infra is more than 3.1% of GDP even without considering Grants in Aid for Capex in the States and Capex of CPSUs;

5)Allocation for  Agriculture under The Prime Minister Dhan-Dhaanya Krishi Yojana in 100 Districts benefiting 1.7 cr farmers is an unique scheme for improving the income levels of farmers.But bringing big Farmers by taxing Agricultural Income exceeding Rs.25 lacs p.a is yet to be implemented.

Other Highlights:-

Tax reforms
  • New income tax slabs to increase take-home pay for salaried individuals and pensioners 
  • Rationalization of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) to simplify the tax process
  • Review of the rate structure for customs duties to reduce disputes and ease trade 
  • Exemption of three more cancer medicines from custom duties

Infrastructure 

  • Development of geospatial infrastructure and data
  • Modernization of land records, urban planning, and design of infrastructure projects
  • Set up of a National Digital Repository of Indian knowledge systems
Climate Action
  • Significant funds allocated for renewable energy infrastructure, including solar, wind, and green hydrogen projects
  • Commitment to net-zero emissions by 2070
  • Concrete steps laid out to reduce carbon intensity in key industries like manufacturing, transportation, and power generation
Others
  • Creation of a “Makhana Board" in Bihar to improve the production, processing, value addition, and marketing of Makhana 
  • Ten thousand fellowships for technological research in IITs and IISc 
  • Documentation and conservation of manuscript heritage 

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