New Delhi, Feb 3: The Union Budget has managed to meet the goals of boosting consumption though tax cuts, increasing capex through transfers to states, and maintaining the path of fiscal consolidation which is expected to lead to a recovery in the economic growth rate with macro stability in a comfortable range, according to a Morgan Stanley report released on Monday.

The report said that both fiscal and monetary policy are pivoting to support growth, which is in line with “our view of a cyclical recovery in growth”.

“The Budget math looks realistic, with nominal GDP assumed at 10.1 per cent for F2026 and gross tax revenue growth of 10.8 per cent. We will remain watchful of income tax collection growth, which the government expects to be 14.4 per cent, given the income tax cuts and execution of capex spending to meet the targets,” the report stated.

The report pointed out that the Budget has balanced needs to support growth and continue with fiscal consolidation. As such, the Budget targets a lower fiscal deficit of 4.4 per cent of GDP for F2026 even as it reduced income taxes to support consumption, especially for middle income tax payers, and expanded capex growth, mainly through a boost in grants to states for capex creation.

“Indeed, as per the Finance Minister, direct tax changes should lead to a 1.0 per cent revenue loss of Rs 1 lakh crore (0.3 per cent of GDP), which should help support consumption,” the Morgan Stanley report said.

On the spending side, the mix remains tilted to capex, with effective capex (direct capex plus grants in aid of creation of capital assets) seen growing at 17.4 per cent in F2026BE vs. 5.3 per cent of F2025RE.

“We expect the Budget to support growth recovery through measures to promote consumption and increase effective capex spending, which will likely lead to a more broad-based recovery, while at the same time continued consolidation should help macro stability remain in check,” the report observed.

The simultaneous boost to consumption and capex has to be sweet for equities, especially in the context of continuing and better-than-anticipated fiscal consolidation (projected primary deficit: 0.8 per cent).

The plethora of announcements around easing of India’s tax regime, including permanent establishment rules, GIFT city clarifications, extension of exemptions to sovereign funds, and changes to tax deduction and collection at source could improve FDI and private investment sentiment, according to the report.

“A new tax code is coming this week, as per the Budget, which could reveal a more liberal tax environment. We are overweight Financials, Consumer Discretionary, Industrials and Technology, and underweight other sectors,” the report added.

New Delhi, Feb 3: After the revision in tax slabs in the Union Budget 2025-26 to leave ‘enough money in the hands’ of taxpayers, the government is likely to unveil the much-anticipated draft of the new Income Tax Bill on February 6.

The proposed bill aims to bring sweeping reforms to the current Income Tax Act and could potentially see up to 3 lakh words slashed from the near 6 lakh words at present.

Citing people in the know, the draft bill is likely to provide directions to widen the tax net, given the contraction in the tax base following the new exemption limits.

Union Finance Minister Nirmala Sitharaman, in her post-Budget press conference, said about 1 crore taxpayers will be directly benefitted from the extended rebates and exemptions, under the New Tax regime.

One crore people will benefit due to the increased tax exemption limit from Rs 7 lakh to Rs 12 lakh. They will have to pay no income tax, she mentioned.

As per the new slabs, proposed in Budget 2025-26, those with an income of up to Rs 12 lakh will have to pay no income tax, marking a decisive change in the tax structure.

Drawing a comparison between the prevailing tax rates and the proposed new ones in FY25-26, she said that those who are earning Rs 8 lakh will have Rs 30,000 more money into their pockets because their tax liability has been brought to zero.

There will be no income tax payable up to income of Rs 12 lakh (average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs 12.75 lakh for salaried taxpayers, due to the standard deduction of Rs 75,000.

Tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them. The maximum rebate available is Rs 60,000 which is there for a taxpayer having income of Rs 12 lakh on which tax is payable as per the new slabs.

New Delhi, Feb 1: Giving a much-needed boost to the space sector, Finance Minister Nirmala Sitharaman on Saturday announced an allocation of Rs 13,415.20 crore for the Department of Space in the Union Budget 2025-26.

In the latest budget, Rs 6,103 crore has been earmarked for capital outlay on space research. The move is expected to facilitate various ambitious projects, including satellite launches and deep-space missions.

The enhanced budget comes as India looks forward to upcoming major space launches including the Ganganyaan — India’s human spaceflight mission — as well as the Moon mission, setting up the Indian space station, and Chandrayaan-4.

The increased investment is expected to integrate space-based applications into critical sectors such as agriculture, disaster management, and urban planning.

This is a remarkable increase from previous budgets and reinforces the government’s commitment to growing India’s space ambitions. The Union Budget 2024-25 allocated Rs 13,042.75 crore for the space sector. A Rs 1,000 crore venture capital fund aimed at boosting private sector participation in India’s space industry was also launched last year.

This rise in funding in the space Budget follows India’s impressive achievements in space technology, such as the successful Chandrayaan-3 lunar mission and the Aditya-L1 solar observation project, underscoring the nation’s growing space capabilities.

“The increase in the space budget is a significant step towards strengthening India’s space ecosystem, fostering innovation, and enhancing global competitiveness,” Indian Space Association (ISpA) Director General, Lt. Gen. A.K. Bhatt (retd) said.

The government also removed customs duty on ground installations for satellites, including spares, consumables, and essential goods used in building launch vehicles and facilitating satellite launches.

“This long-awaited reform aligns with the industry’s needs, and we appreciate the government’s responsiveness to the sector’s requirements,” Bhatt said.

Meanwhile, the Finance Minister also announced the launch of a National Geospatial Mission in the Budget 2025-26.

The mission aims to modernise land records and enhance urban planning across India. This initiative will leverage the existing PM Gati Shakti framework to develop foundational geospatial infrastructure and data, facilitating improved design and execution of infrastructure projects, she said.

Geospatial refers to data or information that is associated with a specific location on the Earth’s surface. The National Geospatial Mission is expected to significantly impact various sectors, particularly in urban development and land management.

The experts noted that the announcement of the National Geospatial Mission shows the growing commitment of the government to use the downstream capabilities of the space tech sector.

“The users in the government, private sector, and the industry have lived with the lack of good foundational data for a very long time. The National Geospatial Mission will provide the necessary resources to create geospatial data that will serve as a foundation for social and economic development,” Esri India Managing Director Agendra Kumar said.