The budget is growth-oriented, with the key highlight being the 35% higher government capital spending target on an already high base. The Finance Minister has focused on putting in the critical multipliers to create a more sustained growth cycle rather than just a one-off impact. There were widespread expectations of some measures, such as tax cuts to support consumption, which did not come true. However, the growth bias was needed as we navigate our way out of the pandemic.
The higher capital spends will eventually flow into the hands of all economic activity participants, including the private corporate and their workforce. The higher government spending, measures, ease of doing business, and “Make in India” theme will help kick-start a broader private capex cycle,” said Nitin Sharma, Director, Research & India Site Head, Fidelity International.