Reserve Bank Of India / RBI Governor Sanjay Malhotra's statement on the budget, know what he said on tax relief

The announcement of making income up to Rs 12 lakh tax-free in Budget 2025-26 was in the news. RBI Governor Sanjay Malhotra praised the budget and called it helpful in economic growth and inflation control. He called the 0.25% repo rate cut and limiting the fiscal deficit to 4.4% as important steps.

Reserve Bank Of India: In the Budget 2025-26 presented on February 1, the Finance Minister's announcement of tax exemption of income up to Rs 12 lakh made headlines. Reserve Bank of India Governor Sanjay Malhotra also praised this Union Budget and called it excellent. Announcing the review of monetary policy, he said that this budget will prove to be helpful in accelerating economic growth and controlling inflation.

Tax relief to the middle class and its effects

Malhotra said that the tax relief of Rs 1 lakh crore given to the middle class will increase consumption, but it will not have any major impact on inflation. According to him, this relief will increase the purchasing power of the general public, which will boost economic activities.

Improvement in fiscal deficit

The governor informed that the government has reduced the fiscal deficit to 4.4 percent, which is better than the previously set 4.5 percent. He saw it as a success of the government's fiscal policies and said that it will strengthen the country's economic stability.

Inflation and food prices

Malhotra said that food prices account for about 46 per cent of consumer price inflation. Of these, the price of vegetables contributes 6 per cent, fruits 2.5 per cent and pulses 2.9 per cent. Special attention has been given to these items in the budget, which will help in controlling inflation in the long term.

Effect of repo rate cut

RBI announced a repo rate cut of 0.25 per cent for the first time in five years. Various economic factors including the Union Budget were assessed behind this decision. The governor also said that the production capacity in the country is sufficient, so that there will be no adverse effect on inflation despite increased consumption.

Economic stability and future planning

Malhotra also mentioned that the RBI is internally reviewing the economic capital framework, which determines the limit of surplus to be transferred to the government. Apart from this, the cost of regulation is being taken into account while making rules necessary to maintain financial stability.

Conclusion

Overall, Budget 2025-26 is being seen as a balanced move to stimulate economic growth and control inflation. Tax relief will provide economic support to the middle class, while fiscal discipline will strengthen the country's economic position. In sync with RBI policies, this budget will play an important role in maintaining the overall economic stability of the country.