Sajjid Chinoy, Head of Asia Economic Research at JPMorgan, shared his views on the Union Budget 2025, stating that the macroeconomic numbers align with expectations. He highlighted that the key theme of the Budget is conservatism, meaning the government has taken a cautious approach.Chinoy pointed out that the fiscal deficit targets are in line with what was anticipated, with the deficit expected to drop from 4.8% to 4.4%. He also mentioned that the government’s projected nominal gross domestic product (GDP) growth for this year is conservatively set at 10.1%, following a lower growth rate from last year. Additionally, he stated that the government’s capital expenditure (CapEx) is in line with nominal GDP growth, continuing a trend from previous budgets.He also touched on the issue of tax buoyancy, which refers to how well tax revenues are expected to grow. After accounting for the revenue losses from tax cuts, the Budget assumes a tax buoyancy of 1.3, meaning tax revenues should increase at that rate. In comparison, this year the tax buoyancy was around 1.1. While there were no major surprises in the fiscal math, Chinoy noted that it would be interesting to see if the government can meet the higher tax buoyancy expectations.
Also Read | Budget 2025: Fiscal deficit for FY26 estimated to be 4.4% of GDP, says FM Nirmala SitharamanIn her Budget speech on Saturday, February 1, Finance Minister Nirmala Sitharaman announced that the fiscal deficit for 2025-26 is expected to be 4.4% of the country’s GDP. The fiscal deficit is the gap between what the government spends and what it earns. Sitharaman also mentioned that the government aims to reduce this deficit further to 4.5% by 2026-27.Catch live updates on FM Sitharaman’s Budget 2025 speech hereClick here for the latest stock market updates
