(04 Feb 2025, 12:35)

Budget prioritises non-inflationary growth through careful fiscal management

Tuhin Kanta Pandey, Finance Secretary

The new budget prioritises non-inflationary growth through careful fiscal management, with the government's entire borrowing channelled exclusively into capital expenditure. When we show the numbers, there is nothing hidden elsewhere. Our entire borrowings are going into CAPEX – nothing could be better than this. It's a non-inflationary budget. The capital expenditure programme of Rs 15.48 lakh crores for fiscal year 2025-26 includes Rs 11.21 lakh crores in direct central government spending and Rs 4.27 lakh crores in grants to states for capital projects. This approach marks a significant shift from traditional patterns where government borrowing often funded revenue expenditure. The government has exceeded its fiscal consolidation targets, achieving a deficit of 4.8 per cent against the projected 4.9 per cent for the current year, with plans to reduce it further to 4.4 per cent in the upcoming fiscal year. The Union Budget 2025-26 tries to balance the impending challenges focusing on demand and supply side imperatives. The stimulus offered in the budget will push growth while fostering macro-economic stability. Whether citizens save or consume these funds, both outcomes benefit the economy – savings strengthen bank liquidity, while consumption benefits spread across industries.

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Budget prioritises non-inflationary growth through careful fiscal management