Reading the budget for intent and not just for the measures that it talks about, this is a reformist budget, in context of the structural reforms already undertaken by the Government such as Labour code, Farm Laws and PLI schemes.

The Budget marks a key shift in Government policy perspective; by way of adopting a wider fiscal deficit to increase spending and fuelling economic growth. This reflects the intent to not be constrained by rating agencies or self-imposed inflation targets.

There is no better solution to India’s multiple problems from the common man’s poverty, to the young man’s lack of jobs to the lack of competitiveness for the entrepreneur than ‘growth’. Unlike past Budgetary exercise, the budget finances this time are grounded in ‘realism’.

Notably, despite the high projected fiscal deficit, the bond yields have only increased by 10 bps as the market seems to have noted the ‘conservative’ approach of the Finance Minister.

The fiscal deficit rate projected (FY22 BE) is perhaps higher than expected but market has drawn comfort from the fact that they have not assumed tax buoyancy and there remains a significant upside to nominal GDP growth estimates.

High on transparency, the Budget has sought to neutralize one of the key concerns related to off-balance sheet deficit. It has sought to use the opportunity of Covid-19 year to come clean. It is also a reflection of the intent that we are fine to live with higher fiscal deficit.

The Budget is highly growth-oriented and would boost employment generation with a keen focus on capex in Infrastructure and Health. The Government has signalled its commitment and resolve to step up on capex to kickstart the virtuous cycle.

Divestment of PSBs is significant as PSBs are no holy cows. PSUs are far less productive as compared to private sector across sectors - Banks, Telecom, Airline, Metals. Hence signalling the intent to monetise and deploy in areas that can help spur growth.

We remain circumspect/ sceptical as this may get mired in political opposition/ resistance by union. But the message here is that despite the opposition on farm laws, the govt is intent on pursuing what it is thinks is economically right even if it is politically inconvenient.

This Budget continues with the theme of improving ‘Ease of Doing Business’ in India and simplification of compliance as seen in the Labour Laws. The Budget proposes to launch a National portal for gig, platform, building and construction-workers among others.

In the backdrop of the ongoing Farmer Protests, the Budget assured continuation of MSP (a key point of dispute) at 1.5 times the cost of production across all commodities. The Budget showed a growth trajectory that will not be constrained by resources.

What remains to be seen, is how well this Government can execute the budgetary measures, which marks the beginning of a growth cycle to achieve the promise of a $5 trillion economy.