FM has given very clear picture of Indian economy, reforms: PM Narendra Modi

Union Finance Minister Nirmala Sitharaman, while responding to the debate on the Union Budget 2025-26 in the Parliament this week, has given a very clear picture of the Indian economy and ongoing reforms, Prime Minister Narendra Modi said on Saturday.

“During her remarks in Parliament, Finance Minister @nsitharaman has given a very clear picture of the Indian economy and the reform trajectory we are undertaking,” PM Modi posted on social media platform X.

During the Budget debate in the Lok Sabha, the Union Finance Minister said the Indian economy will continue to be the world's fastest-growing economy backed by the increase in the government's capital expenditure in the Budget for 2025-26 and rising consumption levels, especially in the rural areas.

The Finance Minister said that the effective capital expenditure works out to 4.3 per cent of the GDP in the Budget for 2025-26 while the fiscal deficit is 4.4 per cent.

She further cited figures from the Budget to show that the capex allocation in the budget has increased to Rs 1.21 lakh crore, dismissing the opposition's claim that the outlay has been reduced.

According to her, inflation management is the highest priority of this government and overall retail inflation is within the notified tolerance band of 2 per cent to 6 per cent.

During the Budget debate in the Rajya Sabha, FM Sitharaman said that the Budget for FY26 was prepared during a challenging time, with serious external challenges beyond estimates or forecasts.

“For decades, we have been talking about globalisation. Now we are facing the issue of fragmentation in the world. Everybody wants to have a free market but there are increasing tariff barriers. The world is growing through a major change,” said Finance Minister.

She further stated that there are no models that you can build and understand how the trends will be because they are very dynamic.

“Despite that, we have tried keeping the assessments as close as possible, keeping India's interests as topmost. This immense uncertainty is still playing out and many Indian imports which are very critical for our economy to grow are also going to be left with uncertainty," she mentioned.

The Budget has not reduced sectoral allocations and the effective capital expenditure during the next fiscal is estimated at Rs 19.08 lakh crore, according to FM Sitharaman.

She also introduced the new Income Tax Bill, 2025, in the Lok Sabha this week, as part of the tax reforms to streamline and simplify the provisions so that they are easier to understand and reduce the scope for legal disputes.