India’s Fiscal Strength and Economic Vision Highlighted in Eighth Budget
Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2025, declared it as a “Budget by the people, for the people,” reinforcing the government’s commitment to economic growth, social welfare, and fiscal discipline. She also underscored India’s robust fiscal track record, brushing off concerns over international credit ratings, particularly from agencies like Moody’s, which have not upgraded India’s credit standing despite its strong macroeconomic fundamentals.
India’s Fiscal Strength: A Key Focus
Ms. Sitharaman highlighted India’s track record of maintaining fiscal discipline, achieving economic resilience, and meeting all debt reduction and fiscal consolidation targets.
- No Defaults: Unlike several global economies struggling with rising debt and economic instability, India has never faltered on its fiscal consolidation path.
- Fiscal Deficit Target: The government aims to bring down the fiscal deficit, ensuring long-term economic stability while continuing its growth-focused policies.
- Debt Management: Despite global uncertainties, India has successfully managed its public debt, making the country an attractive destination for investors.
By emphasizing India’s strong economic fundamentals, Ms. Sitharaman pushed back against the “passive stance” of credit rating agencies like Moody’s, which have not upgraded India’s ratings despite consistent economic growth and fiscal prudence.
Key Announcements in Budget 2025
1️⃣ Tax Relief for the Middle Class
- No income tax up to ₹12 lakh under the new tax regime.
- Increased rebates to benefit salaried employees and pensioners.
2️⃣ Boost for Startups
- A Fund of Funds announced to support startups and innovation.
- Tax incentives for early-stage startups extended further.
3️⃣ Healthcare for Gig Workers
- Gig and platform workers to be covered under PM Jan Arogya Yojana for healthcare benefits.
4️⃣ Farmers & Rural Economy
- Introduction of PM Dhan Dhanya Krishi Yojana to enhance agricultural productivity.
- Increased allocations for crop insurance and irrigation projects.
5️⃣ Support for Small Businesses
- Customized credit cards with ₹5 lakh limit introduced for micro enterprises to ease financing challenges.
6️⃣ Infrastructure & Development
- Major investments in Bihar and other key states, focusing on roadways, railways, and urban development.
India vs. Global Ratings: The Moody’s Debate
Ms. Sitharaman also took a strong stance against credit rating agencies that have not upgraded India’s ratings despite its economic progress.
🔹 Moody’s & India’s Credit Rating
- Moody’s continues to rate India at a lower investment grade, despite India’s consistent GDP growth, strong forex reserves, and stable debt-to-GDP ratio.
- Many experts believe India deserves an upgrade, considering its economic resilience and fiscal discipline.
🔹 Government’s Response
- India’s economy has outperformed expectations, growing faster than major global economies.
- The government remains focused on long-term economic stability, rather than seeking external validation.
By downplaying the importance of credit rating agencies, Sitharaman signaled confidence in India’s fiscal policies and its ability to drive economic growth independent of global rating agencies’ views.
Opposition Walkout & Political Reactions
Despite the bold announcements, the Opposition staged a walkout during Ms. Sitharaman’s speech, criticizing the budget for not addressing inflation and unemployment concerns.
🔸 Opposition’s Criticism
- Lack of direct measures to control inflation.
- Need for more aggressive job creation policies.
- Allegations that the budget favored certain industries over the common citizen.
🔸 Government’s Defense
- The budget focuses on long-term economic stability and growth.
- Investment in startups, MSMEs, and infrastructure will drive job creation.
- Tax relief measures and healthcare benefits for gig workers ensure welfare for all sections of society.
Conclusion: A People-Centric Budget with a Bold Economic Vision
The Union Budget 2025 has been positioned as “by the people, for the people,” emphasizing:
✅ Fiscal discipline & economic stability
✅ Support for the middle class & startups
✅ Welfare for gig workers & farmers
✅ Stronger infrastructure & job creation
While the budget has received both praise and criticism, Ms. Sitharaman’s confidence in India’s economic trajectory and strong fiscal management remains evident.
