Union Budget 2023-2024 Reaction: Radhika Rao, Senior Economist at DBS Group Research

2 Feb 2023 , 09:42 AM

• India’s FY24 Budget was growth supportive whilst sticking with a modest consolidation path
• Fiscal deficit target has been set at 5.9% of GDP vs -6.4% in FY23, along our expectations
• Our preferred gauge of primary deficit (excluding one-off revenues) points to a sharper correction
• Personal income tax structure and rates were tweaked
• Allocations towards capex saw a significant increase, tapping into subsidy savings
• Implications for markets: Size of market borrowings were in line with expectations, triggering a kneejerk boost to bonds