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Union 2025, presented by FM Nirmala Sitarman, is a major Techway and RBI to focus on increasing domestic consumption in rural and urban India as a means of promoting economic growth by RBI.
Promoting consumption was required for hours, which the budget has directly addressed by the zero income tax threshold to Rs 12 lakh.
Written by Sanjay Chawla:
What is a major route from Budget 2025 presented by Finance Minister Nirmala Sitarman and new RBI Governor Sanjay Malhotra’s first monetary policy committee meeting? The answer is congratulations to focus on increasing domestic consumption in rural and urban India as a means to promote economic development.
This is contrary to the government’s earlier approach, which is trying to crowd in private investments by spending Indian ink on capital expenditure for public projects. And in the middle.
The Union Budget 2025-26 is a good balance task between promoting consumption, maintaining investment pace and maintaining fiscal discipline. The budget has “dialogue” in providing high disposable income in the hands of the middle class, addressing the recession in direct consumption. Promoting consumption was required for hours, which the budget has directly addressed by increasing zero income tax threshold. Up to 12 lakh rupees. Also demand for discretionary consumption.
Jugalbandi was clear between the central government and the central bank when on Friday 7 February 2025, the RBI Monetary Policy Committee (MPC) unanimously cut the rate of 25 bps after a period of 5 years, raising the repo rate to 6.25. . Percentage. The repo rate is the rate on which the RBI will temporarily purchase government bonds and lend to commercial banks. It is also a significant rate used by banks to determine the interest rates that, in turn, charge their borrowers.
RBI reads the interest rate of liquidity adjustment facility (LAF) up to 6 percent [Standing deposit facility (SDF) – Marginal standing facility (MSF) range]RBI estimates for GDP growth have increased by 6.7 percent and 4.2 percent for inflation for FY 26, which establishes background for the calibrated rate cut cycle. It is expected that home loan borrowers should lead low outgoes on the term loans taken by industries to establish low EMI and new features or expand capacity.
Meanwhile, the central government itself has not reduced its estimated investment expenditure in main areas such as infrastructure and defense. Pièce de résestance is that the budget also promises fiscal consolidation while maintaining the glide path for the fiscal deficit, which is now touching the distance of near 4 percent with fiscal deficit to decrease by 4.8 percent. . GDP’s FY26 in FY25 4.4 percent.
India is one of the best development stories among the top -10 economies worldwide. Secondly, we are flexible with multiple liver of the target to ensure a smooth ride through uncertain global conditions. We will be willing to consume discretionary consumption from portfolio positioning.
(The author is the Chief Investment Officer-equity, Baroda BNP Paribas Mutual Fund)
