The government's focus on macro-economic stability in a relatively difficult environment is most welcome to set the agenda for future economic growth. The Budget's commitment to fiscal consolidation is also enhanced by the quality of allocations that would promote not just the recent initiatives the government has announced but also focus on agriculture and social reforms and the much needed investment in infrastructure.
These steps are essential for sustained economic growth.
The focus on fiscal consolidation and its likely positive impact on inflationary pressures could provide the necessary headroom to lower interest rates. In a stagnating global economy this may just be the booster shot.
An interesting objective of the Budget is the target to double rural income in five years. This would result in significantly raising rural demand and will have its own cascading effect on the rest of the economy.
This is ambitious but is key to bringing the rural population more into the mainstream economy.
As always, the intended outcomes would depend on the implementation of the programs announced, which could have the potential of continuing the transformation of India.
Atul Dhawan is Partner at Deloitte India.