India, Feb. 2 -- The budget seems to have taken the economically rather than the politically prudent route to achieve its demand objective. There is no big-bang announcement about some new welfare scheme. Allocation for flagship income support programmes such as the rural employment guarantee scheme and PM-KISAN are unchanged. The fiscal deficit is expected to come down from 4.8% in 2024-25 Revised Estimates to 4.4% in 2025-26. This means that the overall fiscal impulse of the budget will be contractionary compared to last year.

But it has given a boost to the purchasing power of the middle classes by bringing down income taxes. In fact, the word "demand" only makes an appearance in the budget speech (outside annexures) when the income t...