The FY25 Budget continued its focus on fiscal prudence, reducing the fiscal deficit to 4.9% from the initially budgeted 5.1%, supported by the RBI’s dividend transfer. Alongside fiscal discipline, the budget aims to boost consumption and employment through personal income tax changes and employer incentives. Higher revenue receipts and the RBI’s transfer have improved fiscal math, allowing for increased revenue expenditure and state transfers, while maintaining capital expenditure at the same level. With a lower fiscal deficit, the government has reduced its gross borrowing by Rs 12K crore. This lower-than-anticipated reduction in market borrowings kept bond yields flat, while equity markets were disappointed by hikes in capital gains taxes.