Noted economist NK Singh, Chairperson of the 15th Finance Commission, praised Finance Minister Nirmala Sitharaman’s Budget 2025, as it will increase disposable income and could stimulate demand and consumption.While the tax revisions will lead to some revenue loss, he said it aligns with the government’s macroeconomic framework. Despite past challenges, the fiscal deficit is set to decline from over 9% in 2021 to 4.4% under the new budget proposals.The government’s Budget 2025 has taken a significant turn by prioritising consumption, capital expenditure (capex), and consolidation. This move, aimed at boosting demand, has received mixed reactions from economists and experts who have examined its fine print and potential long-term effects.
Also Read | What Budget 2025 means for mutual fund marketsSingh also pointed out that the projected reduction in debt-to-GDP (gross domestic product) ratio, which is expected to fall to just over 50% by 2030-2031, signals macroeconomic stability. This is likely to be well received by investors and credit rating agencies. The upcoming tax reforms aim to simplify and streamline assessments, making tax procedures more transparent and efficient.Surjit Bhalla, Former Executive Director – India, IMF, another prominent economist, lauded the Budget for addressing both tax and non-tax components effectively. He noted that the overall economic policies announced were well-structured and in the right direction.However, he expressed concerns regarding the income tax slabs, pointing out an anomaly where those earning ₹12,00,001 would face a sudden tax burden of ₹60,000 due to the slab structure. He hoped that the upcoming tax bill would address and rectify such inconsistencies.Also Read | Overall, a welcome budget, but a GST waiver on lifesaving drugs would have been ideal: Kiran Mazumdar-ShawBhalla compared this Budget to the transformative 1991 reforms but acknowledged that the current economic conditions, while challenging, are not comparable to the crisis of that era. He urged for clarity on taxation provisions, suggesting that a fairer tax structure would make this one of the most reformist budgets in recent times.Rathin Roy, Distinguished Professor Kautilya School of Public Policy examined the fiscal discipline aspect of the Budget, noting that government expenditure has been on a shrinking trajectory since 2016, apart from the COVID-19 years.A key highlight of the Budget is the promise of a new tax bill next week, aimed at harmonising and improving the existing tax legislation. Roy viewed this as a significant reform, likely to boost business confidence and ease the process of doing business in India. He welcomed this measure as a crucial step toward a more predictable and efficient tax regime.Also Read | FM Sitharaman defends rupee stability, says it’s not depreciating against any currency other than USDFor the entire discussion, watch the accompanying video
