Union Budget 2024 - Fiscal Prudence Dovetails Tax Reforms: Yes Securities

Yes Securities Report

Despite the setback for equity investors due to changes in capital gains tax, the Union Budget 2025 is balanced and consistent in policy, while also paving the way for ongoing reforms in the tax regime.

Addressing concerns about populism, the fiscal deficit target of 4.9% underscores a strong commitment to fiscal responsibility. The government has introduced various schemes to support the poor, women, youth employment, and farmers, yet the overall budgeted expenditure, including subsidies, remains largely unchanged from the Interim Budget.

However, the government is steadfast in its commitment to capital expenditure, maintaining it as a percentage of GDP.

Meanwhile, receipts are driven by the windfall from RBI dividends. The rationalization of personal income tax slabs is a positive step to boost consumption.

Clearly, the government's broader goal is to simplify and rationalize tax structures, with further reforms anticipated in future budgets.

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