Union Budget Prudently Manages Fiscal Consolidation and Growth: RBI

Mumbai, Feb 19 (PTI) The Union Budget presented by Finance Minister Nirmala Sitharaman "prudently manages" fiscal consolidation and growth objectives, an article by Reserve Bank staffers said on Wednesday.

In the article, which may not reflect the central bank's views, Akash Raj, Harshita Yadav, Kovuri Akash Yadav, Aayushi Khandelwal, and others said the document reaffirms the Centre's commitment to fiscal discipline.

It also aims to foster inclusive and long-term economic growth, the article published in the RBI's monthly bulletin for February said.

"With a fiscal deficit target of 4.4 per cent of GDP, the Budget prudently manages fiscal consolidation and growth objectives," the article said.

For growth, the Budget focuses on four pillars of agriculture, small businesses, export sector and investments, it added.

The Budget articulates reforms in taxation, power, urban development, mining, financial sector and regulatory frameworks, it said.

The Rs 1 lakh crore of tax relief to the middle class is expected to bolster household disposable incomes and stimulate consumption, it said.

Earlier this month, RBI Governor Sanjay Malhotra had lauded the Union Budget for FY26 as an "excellent" document that will help both in economic growth and also in the central bank's core objective of curtailing inflation.

Malhotra, a career bureaucrat who took over as RBI Governor in December, also said the Rs 1 lakh crore of tax relief given to the middle class to spur consumption will not have any major impact on inflation.