Namrata Mittal, CFA & Senior Economist, SBI MF for your reference.
“Union Budget 2023 has built on the foundation laid in the prior budget- fiscal prudence without compromising growth. The fiscal deficit is expected to consolidate by 50bps to 5.9% in FY24 with a vision to consolidate to 4.5% by FY26. The quality of expenditure has improved with capex to GDP rising to 3.3% of GDP (vs. sub 2% pre-COVID). The massive increase in capex outlay alongside reduced tax liability on personal income tax is a twin approach to boost both infrastructure and consumption spending. Nominal growth expectations look a tad optimistic, thereby laying a slight bit of manageable optimism to receipts. Long-term capital gains tax has been left untouched allaying the fears of the equity market. Inclusiveness has been catered to without losing an eye on the transition to a green economy. The gross borrowing number budgeted for FY24 is pegged at Rs 15.4 trillion, which is marginally better than street expectations. Prima-facie, budget 2023 should be cheered by equity and fixed income market alike.”