'The honourable FM has done a fine balancing act in his budget speech, with something for everyone, given that this is an election year budget. He has kept the interest of both Bharat and India in mind and announced measures which caters to all.
The fiscal deficit of 3.4% for this year in a minor slippage, I am sure the markets will not be too worried about it and infact have responded well. The market is relieved to hear that the government continues on road of fiscal discipline with Fiscal deficit at 3.4% for FY 20. We have to see how the government will achieve this, but directionally it gives great comfort.
For Bharat, the Assured Farm Income
scheme called PM Kisan Sanman Nidhi
, is a good move. Rs 6000 / year for every farmer will cost Rs 75,000 cr and will be 0.26% GDP. The fact that this a DBT scheme also ensures that the money reaches the hands of the farmer. Rs 60,000cr for MNREGA, Rs 3000cr savings through the Ayush Bharat insurance program will help put more money in the hands of Bharat. The social security through pension scheme of Rs 3000 per month for 42L workers in the Unorganized sector is a welcome move for these workers who were deeply affected in the last few years.
The Personal Income tax slabs going up to Rs 5L, increased standard deduction limits of Rs.50000, along with increase in TDS limits in savings accounts from 10,000 to 40,000 is a welcome move and is pro middle class and will boost urban consumption. Personal consumption will continue to drive growth. Continued spends on Roads (19,000cr), Railways (64,000cr) and Defence (3L crs) by the government is crucial as private investments are yet to kick in. This spend by the govt will be required to keep our GDP growth going. Real Estate, SME sectors also have some benefits announced and will help in revival of these sectors. Overall a good budget, which will keep India on course.'
Mahesh Balasubramanian, MD & CEO, Kotak General Insurance.