The new Modi government unveiled a responsible and prudent budget yesterday that focused on job creation, upskilling the youth and women, and improving infrastructure, Commerzbank FX strategist Charlie Lay notes.

Government maintains commitment to fiscal consolidation

“The Indian government maintained its commitment to fiscal consolidation and there were no signs of fiscal profligacy. Some had feared a ramp-up in populist spending after the weaker-than-expected performance by PM Modi’s Bharatiya Janata Party (BJP) in this year’s federal election. The government even lowered the fiscal deficit projection for the current fiscal year 2024-2025 to 4.9% of GDP vs the interim projection of 5.1% in February and against 5.6% for the previous year.”