Union Budget 2023-2024 Reaction: Mr. Abheek Barua, Chief Economist, HDFC Bank, commentary on Budget 2023

The budget recognized that it would have to continue playing the lead role in driving investments in the economy given the rising global risks and only a nascent recovery in the private capex cycle. The capital outlay for 2023-24 was raised to Rs 10 lakh crore, a rise of 33% year on year.

The budget also pays heed to the need for fiscal consolidation reducing its fiscal deficit target to 5.9% of GDP in 2023-24 from 6.4% in 2022-23. The resultant lower than expected market borrowing number is likely to bring some relief for the bond market. We see the 10-year bond yield to moderate towards 7-7.1% in FY24.

The budget also announced adjustments in income tax slabs that is likely to boost consumption and savings in the economy, benefitting taxpayers particularly at the lower brackets of the income pyramid.