Mumbai, Jul 23: The Union Budget complements the main takeaways from the Economic Survey and focusses clearly on medium term development of the economy. The thrust on agriculture, skill development and MSMEs and consequently leading to employment generation will continue to be the main focus areas for the government in the coming years.

The overall size of the budget has remained almost unchanged from the Interim one. The budget has shown strong intent on moving along the fiscal prudence path and targeted the fiscal deficit at 4.9 per cent for the year. The said action will keep the growth steady as well as robust not only for economy but also bankin

Debadatta Chand, Managing Director & CEO, Bank of Baroda says, “This will make it easier to touch the 4.5 per cent mark in Fy26 as per the FRBM target. More importantly for the financial year the overall gross borrowing and net borrowings have been pegged at almost the same level as in the Interim Budget. This means that it is virtually neutral for the market in terms of liquidity and bond yields, which has positive impact on the economy.”

The banking sector can see substantial positive takeaways from the Budget which goes beyond the neutral impact on liquid, he added.

First, there is a focus on MSMEs with a credit guarantee scheme being brought in. Any support to the MSMEs will be positive growth of not just GDP but also employment. Second, at the retail level, there is emphasis on education loans which will also help in skill building that is the need of the day. Third, the Budget speech also spoke about recovery and the focus will be on debt recovery tribunals.

Fourth, the balanced regional development goal also includes setting up of more touch points in the North Eastern Regions which will help to make banking more universal. Last the reiteration of the budget to encourage housing also means that banks will have a larger role to play in carrying out this programme at both the rural and urban levels.

Shachindra Nath, Founder and Managing Director, UGRO Capital says, “Today's Union Budget is a remarkable step forward for MSME credit. At UGRO Capital, we believe MSMEs play a vital role in our economy, particularly in addressing employment challenges in a country of our size.”

The budget's focus on MSMEs addresses these issues head-on. Increasing the limit of MUDRA loans, the credit guarantee scheme for capital expenditure and machinery purchases, and the emphasis on public sector banks' credit assessment and solving the problem of MSME which comes under distress are all groundbreaking measures. These announcements collectively signify a significant focus on MSMEs, empowering lending institutions in priority sector to provide more credit and continue building our nation. We are hopeful that the fine print will favor lending institutions dedicated to MSMEs, allowing us to continue our mission of national development.

PR Seshadri, MD & CEO at South Indian Bank says, “The Finance Minister has announced many impactful measures in the Union Budget. The proposal to rationalise both direct taxes and GST are heartening and may potentially lead to a truly progressive tax structure.”

The push for housing and employment are commendable. Similarly, the measures announced for improving credit delivery to MSMEs – enhancement of MUDRA loan limits and introduction of credit guarantee scheme, will incentivise financial entities to lend to India’s small entrepreneurs. Besides, the Budget has made provisions to improve the rural economy, including increasing outlay under PMAY, and for agricultural research and rural development. The Union Budget has enough incentives to spur India’s youth, farmers and business class to seek fulfilment of their aspirations. It will allow the economy to move ahead on its growth trajectory.

VP Nandakumar, MD & CEO at Manappuram Finance says, “Union Budget 2024-25 takes forward the measures announced in the Interim Budget outlining a roadmap for 'Viksit Bharat'. Nine priority areas identified in the Budget which include agriculture, education and MSME segments will facilitate skilling and employment generation while boosting manufacturing growth.”

Infrastructure push is reiterated with a Central govt capex outlay of 11.1 lakh crore and 1.5 lakh crore towards interest free capex grant for states. Special emphasis on rural roads augur well for rural incomes as hinterlands will be better connected to the mainland, helping farmers to effectively market their produce. This is good news for the transportation and logistics industry as well.

Meanwhile, hike in Mudra loan limit and collateral free loans for small enterprises are big positives as this sector accounts for 45 per cent. Personal income tax has seen some rationalisation although the expected changes did not kick in and disposable incomes will not be boosted to the expected levels.

The budget proposals strike a fine balance between growth and fiscal prudence. The lower fiscal deficit target will reduce central govt debt and facilitate a sovereign rating upgrade apart from softening government security and corporate bond yields."