Six smart themes that define Budget 2025-26

This provides some cushion to deal with the volatility in the world today even though it signals maintenance of the spending on infrastructure, forsaking the increase that had been seen in her previous budgets. This has benefits too: It avoids crowding out the private sector from credit markets, reduces the government borrowing requirements and signals a move towards a lower government-debt-to-GDP ratio that might help us in India’s negotiations with credit rating agencies for a rating upgrade.

Spur labour-intensive industry: The budget has signalled a very large push towards labour-intensive industries. It has done this together with actions to improve labour productivity. It has proposed an increase in skilling centres and encouraged a partnership model with the private sector. It has also subtly encouraged self-learning by increasing the provision of broadband connectivity in secondary schools together with the provision to provide digital books in the vernacular.

The industries that have been brought into focus are — tourism, textiles, toys and leather. If we were to just dwell on the provisions for tourism — it has announced reduction in costs of getting visas and facilitated the provision of e-visas for tourists. To try and get the tourist to stay “ek-din-aur” (one more day), as I had suggested before the budget, it has created a challenge fund in partnership with states to give a fillip to the top 50 tourist sites to obtain funding from the Centre for hotels, airports and other tourist facilities. It has suggested a focus on religious tourism and medical tourism.

As a Bihari, I am especially happy with the focus on Bihar. Bihar has the youngest demographics in India and supplies labour to all parts of India: Today, most of the agricultural workers in Punjab, manufacturing labourers in Chennai, security men in Mumbai and taxi drivers in most metros are Biharis. The government has announced a slew of measures to support the state through a combination of actions — Buddhist tourism in Bodh Gaya, Nalanda and Rajgir, expansion of Patna airport, a new airport in Bihta, and setting up institutions of learning in Bihar (National Institute of Food Technology, more seats at Patna IIT, more skilling centres.), all overdue and very useful.

Consumption: In response to the clamour to spur consumption, the government has provided meaningful direct tax relief to the middle class. They will get a tax relief between ₹70,000 to ₹1,10,000, with an overall tax foregone of over one lakh crore. There have also been cuts in tax deducted at source from property rents and in remitting under the RBI scheme overseas. Further, to stimulate demand for industry, several measures have been announced to make it easier for the private sector to export. There is also a focus on increasing productivity in agriculture by improving seed quality and increasing the land under irrigation. Several other steps for the rural population have been mentioned, which should support rural demand.

Deregulation: As the Chief Economic Advisor had highlighted in the Economic Survey, the regulatory chokehold on animal spirits in India must be lifted. The finance minister has suggested measures to curb tax harassment and a focus on four areas to facilitate the ease of doing business: Appoint a committee to suggest measures within one year to reduce regulatory impediments in doing business including a leaderboard of investment-friendly states and their ranking; get the Financial Sector Development Council to look at financial sector regulations and coordination and create a central KYC; and speed up company merger approvals and to encourage cross-ministry coordination. The one area the FM should add to this list is to facilitate dignified splits in family agreements for family-owned businesses.

Technology: There were several announcements that taken together recognise new developments in technology, especially with DeepSeek in Artificial Intelligence, and the need to spur startups and R&D. A ₹20,000-crore fund for startups, predictability in tax holidays, multiple relaxations for GIFT city, a push for STEM (science, technology, engineering and mathematics) education, more seats in IITs, and a push for global capability centres, seen together, suggest a recognition to not get left behind in technology.

Infrastructure: Infrastructure spending was maintained at a 10% growth rate with an increase in asset monetisation from ₹6 lakh crore to ₹10 lakh crore both in keeping with the government’s capacity to spend and a shift in focus to create more public-private partnerships. A notable shift in the power sector was the introduction of a 100 GW target for nuclear with small modular reactors.

I am glad that the FM acknowledged Biharis in this budget fulsomely. She recognised their youth and mobility, which keeps the engine of the Indian economy running with their labour. She also recognised their innate intelligence by increasing the capacity of Patna IIT and paid homage to its history by facilitating international tourists to visit the holy Buddhist sites in numbers larger than those that visit the Vatican!

Janmejaya Sinha is chairman, BCG India. The views expressed are personal