Indian Budget: India's inflation is low and stably moving to target; uncertainties remain

Fiscal Policy and Economic Stability

• Fiscal deficit seen at 4.9% vs 5.1% in interim budget.
• To reduce fiscal deficit to below 4.5% by FY26.
• Gross borrowing target retained at interim budget target of INR 14.01tln.

Infrastructure and Investment

• Will maintain strong fiscal support for infrastructure investments in the next 5 years.
• To promote the INR for overseas investments.

Tax Policy and Import Duties

• To further simplify rationalise goods and services tax.
• To review import tax structure over the next six months.
• Propose to undertake rate structure of import duties.
• To cut import tax on mobile phones and reduce import tax on some mobile parts.
• Scrap import duty on 25 critical minerals.
• To reduce import tax on gold bars and silver bars to 6%.
• To raise import duty on some telecoms equipment.
• To review Income Tax Act.
• Long-term capital gains tax to be 12.5%.
• Securities Transactions Tax on futures and options to be raised to 0.02% and 0.01% respectively.

Rural Development and Agriculture

• Announces provisions of INR 2.66tln for rural development.
• Is to fast track growth of the rural economy.
• To focus on productivity, resilience and agriculture.

Employment and Job Creation

• Large scale jobs are to be a policy goal.
• Employment incentives are to be launched under three schemes.

Urban Development

• To focus on urban development.

Energy Transition

• To support energy transition too expand list of exempted goods.