India's Budget: laying foundations for tomorrow
FM presented her 3rd Covid Budget amidst global challenges like fiscal deficit and inflation. Past PLI schemes succeeded. Positive global sentiment and FTAs boost FDI. Focus shifted from dramatic policies to infrastructure spending to drive growth, attracting foreign manufacturing investment. FM prioritized allocation over tax changes. Infrastructure projects include Vande Bharat trains, cargo terminals, expressways, digital banking, 5G, and river linking. GIFT city to be a financial hub with international arbitration. RBI will issue a cryptocurrency with a 30% capital gains tax on virtual assets. "Digital" underscored tech focus.
Ease of business reforms include tax simplification, insolvency law changes, new SEZ legislation, and an e-Bill system. Sunrise industries (AI, space, green energy, etc.) will receive attention. A task force for the AVGC sector will be created. Sustainable growth initiatives involve energy saving and blended fuel. Tax incentives for startups and manufacturing extended. Customs duties rationalized to promote "Make in India," favoring domestic manufacturing. Defence spending prioritizes local players. Strategic divestments were unmentioned. Fiscal deficit target is 6.4% this year, aiming for 4.5% by FY26. Budget leverages positive sentiment, dependent on Covid's containment.