This is a "disinflation budget" with more focus on fiscal consolidation and it paves the way for more monetary policy action, according to Maneesh Dangi, founder of Macro Mosaic Investing and Research Pvt.
The fiscal deficit of 5.1% is sort of paving the way for the pivot for ease in monetary policy, Dangi told NDTV Profit on Thursday. "This is not a growth budget, this is a disinflation budget, and essentially, very good in the long and medium term."
Finance Minister Nirmala Sitharaman presented the interim budget 2024, in which FY25 gross market borrowings have been pegged at Rs 14.13 lakh crore. This was lower than a number of Rs 15 lakh crore that economists had expected.
Dangi said the pivot would be increasingly back to a 2016–18 regime, where "we will have a 4.5% fiscal deficit in one or two years and then, mostly, the local household and private sector will help the economy grow".
The household sector is 40% of the private capex and it has been weak for eight to 10 years. Because half the households are borrowing money through some means, the monetary policy is a better way to reach them, according to Dangi.
Private capex boom seen in the 2000s will not happen soon as corporations will take time to scale up investments. Credit subsidy and easy monetary policy will boost households to buy more, he said.
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