In a global landscape characterised by reactive responses, New Delhi has delivered a document heavy on structural intent, staying away from populist fireworks. By eschewing spectacle for fortification, the government presents a sophisticated thesis: in an era of volatility, the most valuable currency is relentless consistency.
The centrepiece is a balance between prudence and ambition. Adhering to a strict fiscal deficit of 4.3%, coupled with declining debt-to-GDP, separates India from peers. This discipline anchors macro-stability and keeps yields predictable. Yet, prudence has not stalled growth. A record public capital expenditure of ₹12.2 lakh crore reinforces a capex-led strategy, providing strong multi-year visibility for the core industrial complex.
Crucially, the narrative has shifted from announcing projects to financialising them. The push to deepen corporate bond markets and incentivise municipal issuances signals a structural move toward market-led infrastructure financing. This logic extends to the public sector itself with the proposal to set up dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs). By monetising large, under-utilised prime land holdings, the government is not only creating a large source of non-tax revenues, but also turning dormant assets into opportunities for new projects. Complemented by the Infrastructure Risk Guarantee Fund, which mitigates execution risk for lenders, the "plumbing" of India's economy is being overhauled to handle global capital at scale.
This drive to attract long term capital is most visible in the aggressive push for GIFT City. The Budget has doubled the tax holiday for new businesses there to 20 years. Following this period, companies face a flat 15% tax rate, a substantial advantage over the 35% base rate elsewhere. This decisive move positions GIFT City as a competitive, low-tax gateway for global reinsurers and international funds.
The ambition extends to digital architecture. A tax holiday until 2047 for foreign cloud providers positions India as the engine room of the global digital economy, incentivising massive local capacity creation. Complementing this is a vital friction-reduction measure: raising the safe harbour threshold for IT services to ₹2,000 crore, bringing operational certainty to the Global Capability Centres (GCCs) that power the Fortune 500.
Beyond sectors, the strategy widens economic geography. The focus on manufacturing depth is matched by a specific thrust on "City Economic Regions," backed by a special allocation of ₹5,000 crore per region. This acknowledges that the next phase of GDP expansion will be driven by Tier-II and Tier-III cities, creating a funded framework to accelerate this transition.
Ultimately, the signal is stability. By prioritising policy continuity and liberalised foreign investment rules, the Government is demonstrating predictability.
The author is CEO, India & South Asia, Standard Chartered Bank.
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Crucially, the narrative has shifted from announcing projects to financialising them. The push to deepen corporate bond markets and incentivise municipal issuances signals a structural move toward market-led infrastructure financing. This logic extends to the public sector itself with the proposal to set up dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs). By monetising large, under-utilised prime land holdings, the government is not only creating a large source of non-tax revenues, but also turning dormant assets into opportunities for new projects. Complemented by the Infrastructure Risk Guarantee Fund, which mitigates execution risk for lenders, the "plumbing" of India's economy is being overhauled to handle global capital at scale.
This drive to attract long term capital is most visible in the aggressive push for GIFT City. The Budget has doubled the tax holiday for new businesses there to 20 years. Following this period, companies face a flat 15% tax rate, a substantial advantage over the 35% base rate elsewhere. This decisive move positions GIFT City as a competitive, low-tax gateway for global reinsurers and international funds.
The ambition extends to digital architecture. A tax holiday until 2047 for foreign cloud providers positions India as the engine room of the global digital economy, incentivising massive local capacity creation. Complementing this is a vital friction-reduction measure: raising the safe harbour threshold for IT services to ₹2,000 crore, bringing operational certainty to the Global Capability Centres (GCCs) that power the Fortune 500.
Beyond sectors, the strategy widens economic geography. The focus on manufacturing depth is matched by a specific thrust on "City Economic Regions," backed by a special allocation of ₹5,000 crore per region. This acknowledges that the next phase of GDP expansion will be driven by Tier-II and Tier-III cities, creating a funded framework to accelerate this transition.
Ultimately, the signal is stability. By prioritising policy continuity and liberalised foreign investment rules, the Government is demonstrating predictability.
The author is CEO, India & South Asia, Standard Chartered Bank.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
