Fiscally prudent, reforms-driven Budget paves way for future growth

India’s economic resilience amidst an uncertain world order provides a unique opportunity to our nation. Government policy plays a major role in leveraging this opportunity to transform India into an economic powerhouse. The Union Budget FY26 is a step towards that. I would like to congratulate our finance minister for presenting a fiscally prudent, reforms-based Budget designed to not only address the present economic slowdown but also prepare the country for future challenges. The focus on uplifting 17 million farmers in 100 weakest farming districts is a step towards ensuring equitable development across the country. It is unfortunate that even after 75 years, 112 aspiring districts are subjected to abject poverty, but focused reforms like those announced today are expected to improve the situation, with the support of the private sector.

 

Ease of doing business is a necessity for a conducive business environment. I am encouraged by our finance minister’s thoughts on a trust-based, light-touch regulatory environment and its impact on ease of doing business, job creation and productivity. I look forward to the outcome of the proposed high-level committee for regulatory reforms. There is no denying the role of a robust regulator in the financial sector. However, the regulatory process should be up-to-date with the ever changing dynamics of the sector. Financial sector regulators need to adapt to the spirit of vivaad se vishwas, and can moderate some of the prevailing regulatory requirements. A quick reduction in policy rates can be a good start. Additionally, I expect IBC to significantly improve the time taken from admission to resolution, and fast track the process of unlocking value. I am enthralled with the allowance of 100 per cent FDI in India’s insurance sector. This will improve insurance penetration by attracting higher funding and competitiveness within the industry.

 

Lastly, I expect a major fillip to consumer demand arising from the extra income generated through lower income taxes. India has about 1.1 billion individuals classified as mid-income and aspiring. A large section of this demography will be adequately incentivised to increase consumption. A systemic rise in consumption is bound to raise economic growth significantly, since 60 per cent of India’s GDP is composed of private spending. Additionally, I am hopeful the new Direct Tax code, when it is released next week, will further simplify and rationalise India’s tax structure and impact consumer and business sentiments positively.

The writer is chairman, Piramal Group