`42.7 LAKH CRORE `50.6 ● GROSS TAX REVENUE UP 10.8% OVER FY25 (RE); BUOYANCY UNCHANGED AT 1.1 LAKH CRORE FINANCIAL EXPRESS ON SUNDAY SUNDAY, FEBRUARY 2, 2025 30 Pages, `12 (Patna `12, Raipur `12, Srinagar `15) P U B L I S H E D OR 14.2% OF GDP COMPARED TO 14.6% IN FY25 F R O M : A H M E D A B A D , B E N G A L U R U , LAKH CRORE ● FISCAL DEFICIT OR 4.4% OF GDP FOR FY26 AGAINST 4.8% OF GDP FOR FY25 Follow us on Twitter & Facebook. App available on App Store & Play Store WWW.FINANCIALEXPRESS.COM VOL XXIV NO. 14 NEW DELHI `15.7 ● BUDGET SIZE C H A N D I G A R H , C H E N N A I , READ TO LEAD H Y D E R A B A D , K O C H I , K O L K A T A , L U C K N O W , M U M B A I , N E W D E L H I , P U N E FM throws a partyfor aam aadmi KG NARENDRANATH F INANCE MINISTER Nirmala Sitharaman proposed a tight Budget for FY26, allowing her to stick to the fiscal consolidation path,and seemed putting up with economic growth of 6-6.5% for the medium term. Yet, a decent consumption stimulus was unveiled in the form of `1-lakh-crore tax giveaways to the “middle class” to impart a short-term push to the faltering growth, and address a growing clamour for relief from large sections facing an income crisis. The finance minister is obviously hoping that the money she has put in the hands of the peoplewillcauseconsumptiontoriseagainandaccelerate economic growth. This, however, came with an apparent plateauing of budgetary capital expenditure growth, and might also reflect an erosion of the capacity among public-sector entities to implement projects MARKETS UNMOVED Sensex Open: 77,637 5.39 points (0.01%) NIRMALA SITHARAMAN, FINANCE MINISTER DEBT-GDP RATIOWILLBE ONADECLINING PATH DEPENDING UPON GROWTH, STIMULUS OR FURTHER CONSOLIDATION INSIDE >> INTERVIEW, PAGE 20 NARENDRA MODI, PRIME MINISTER THIS BUDGET IS A FORCE MULTIPLIER. ITWILL INCREASE SAVINGS, INVESTMENT, CONSUMPTION, AND GROWTH at the furious pace they used to,in the immediate post-pandemic years. Private-sector players, including MSMEs, have to take the lead in fixed asset creation, as public capex, being just 10-11% of the gross domestic product (GDP), cannot invigorate the economy for long. With the size of the Union Budget FY26 pegged at 14.2% of GDP, compared with 14.6% in FY25, and the recent peak of QUICK PICKS Committee to review norms, compliances Centre looks to lower debt-GDPratio to 50% TO REBUILD A buffer and provide space for growthenhancing expenditure, the Centre unveiled a new medium-term fiscal consolidation plan centred around debt-to-GDP ratio reduction to 50% with a tolerance band of +/-1 percentage point by FY31. Continued on Page 16 Jan 31, 2025 (close) 77,500 77,505 THE BIG IDEAS FOR... TAXPAYERS ● ‘Nil’ tax slab raised sharply to `12 lakh (for the salaried, new limit is `12.75 lakh with standard deduction) ● I-T slabs under new regime changed across the board INVESTORS ● Big boost for consumption- based sectors like FMCG, automobiles, hotels, aviation ● Govt extends tax breaks for GIFT City to March 2030 in bid to lure investments TECHNOLOGY ● Benefits for startups to be formed till FY30; higher credit guarantee for startups, MSMEs ● CoEs inAI for agri, health, sustainable cities; new `500-cr AI centre for education IN A BIG boost to micro, small and medium enterprises, (MSMEs), the Union Budget 2025 has proposed to more than double the investment and turnover threshold for such businesses, enabling more enterprises to get government support. ■ PAGE 10 Feb 1, 2025 (close) Low: 77,006 Morebusinessestoget MSMEtag,benefits A COMMITTEE FOR regulatory reforms will review all non-financial sector regulations,certifications,licences, and permissions,and present its report in ayear.Stateswillbeencouragedtojoinin.A separate mechanism under the Financial Stability and Development Council will assess the impactof all financial norms. 16.1% in FY22, the fiscal deficit estimate for the current fiscal is revised to 4.8%,marginally lower thantheinitialprojectionof4.9%. It is seen to reduce to 4.4% in the next financial year. Gross market borrowings in the next fiscal will grow 6% on year to `14.82 lakh crore, a rate lower than the nominal GDP growth estimated of 10.1%. High: 77,899 SUNEESH K `1-lakh-cr gift for middle class, but govt sticks to fiscal prudence ■ PAGE 11 THEIR TAKE SUDIPTO MUNDLE CHAIRMAN, CENTRE FOR DEVELOPMENT STUDIES ■ PAGE 12 RC BHARGAVA CHAIRMAN, MARUTI SUZUKI INDIA ■ PAGE 12 SAJJID Z CHINNOY HEAD, ASIA ECONOMIC RESEARCH, JP MORGAN ■ PAGE 13 KALYAN KRISHNAMURTHY CEO, FLIPKART ■ PAGE 13 KUMAR MANGALAM BIRLA CHAIRMAN, ADITYA BIRLA GROUP ■ PAGE 2 NILESH SHAH MANAGING DIRECTOR, KOTAK MAHINDRAAMC ■ PAGE 4 IMPACT How will key sectoral stocks in automobiles, fast-moving consumer goods, insurance, infrastructure and metals respond to the Budget proposals? FIND OUT ON ■ PAGE 15 New Delhi CONSUMERS ● `15,000-crore SWAMIH Fund 2.0 to boost affordable housing; 75,000 medical education seats over 5 years ● Cancer drugs, smartphones, motorcycles to be cheaper ECONOMY ● `1-lakh-cr Urban Challenge Fund; `10,000-crore outlay for FY26; nuclear energy target of 100 GW for 2047 ● Asset monetisation target of `10 lakh crore for 2025-30 RURAL INDIA ● PM Dhan-Dhaanya Krishi Yojana to cover 100 districts with low productivity ● `5-lakh higher credit limit under kisan credit cards; gene banks for crops