As expected, the budget is heavy on Capex (at 10 lakh crore, increase of 37% from FY23 revised estimates) which is needed to ensure the cyclical recovery continues. Infra (railways 2.4 lakh crore, 50 new airports and clean energy 35,000 crores) along with the Agri push will help the rural economy improve by boosting employment and incomes. Allocation to affordable housing of 79,000 crores, increase of 66%, will also help the housing market retain momentum. Incentives for local production in form of lower duties will also be helpful. Overall, this budget push on capex will ensure that the private capex greenshoots really sustain, help inclusive growth and make the economy become more resilient in light of the global slowdown.
Both Equity and Bond markets have reacted positively to the budget, as the thrust to maintain the cyclical recovery and largely maintain fiscal prudence has helped lift sentiments.
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