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Below the Views on how the Budget has touched upon all key elements to accelerate economic growth by Mr. Ravi Kumar Jha - MD & CEO at LIC Mutual Fund AMC

"The Union Budget 2025-26 has a clear focus on boosting consumption and energizing the rural economy. The emphasis is clearly on reviving core sectors like agriculture, MSMEs, affordable housing, textiles, leather, fisheries etc, and promoting manufacturing. Enhancing the credit guarantee cover of MSMEs and announcing the ‘National Mission on High-yielding Seeds’, ‘National Mission on Cotton’, and ‘National Manufacturing Mission’ are noteworthy. Enhancing the credit limit of 7.7-crore Kisan Credit Cards from Rs 3 lakh to Rs 5 lakh is another indication.

Apart from this rural focus, providing significant personal income tax relief to middle-class taxpayers and additional exemptions to senior citizens will give a fillip to the economy and promote consumption. In addition, the Budget envisages increased credit flow to weaker sections of society, including women, SC/STs, gig workers, street vendors etc. It will lead to an overall economic revival at the grassroots level, which was very much necessary given the slowing pace of consumption in the rural as well as urban landscapes, reflected in the Household Consumption Expenditure Survey 2022-23.

Another notable feature of the budget is that the government is firm on its fiscal glide path. Bringing down the FY26 fiscal deficit target to 4.4% of the GDP is a laudable achievement given the tough global as well as domestic macroeconomic conditions. Low market borrowing will definitely crowd in private players.

The Budget 2025 also has announced measures to simplify the KYC process by rolling out the Central KYC Registry in 2025. This will ease the entry of new investors under financial inclusion.

The Budget outlines estimated Gross Market Borrowings at Rs.14.82 Lakh Crores and the Net Market Borrowings at Rs.11.54 Lac Crores to finance the fiscal deficit of 4.4 % for FY 26. This appears to be in line with market expectations.

Overall, it is a good and positive Budget, which gives equal thrust on rural economy, manufacturing, exports and economic reforms. Another major decision in the BFSI sector is allowing 100% FDI in the insurance sector. Further, the government’s continued focus on ‘Ease of Doing Business’ customs duty cuts, and overhauling of the regulatory mechanisms is commendable."

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