06 February 2025 : The Hindu Editorial Analysis

1. A Budget that is mostly good but with one wrong move

(Source – The Hindu, International Edition – Page No. – 8)

GDP Growth and Capital Expenditure

• The government has projected a nominal GDP growth of 10.1% for 2025-26, which is considered reasonable.
• The Economic Survey 2024-25 indicated real GDP growth between 6.3%-6.8% for 2025-26, allowing some flexibility if growth increases.
• Capital expenditure for 2025-26 is projected at ₹11.2 lakh crore, an increase of ₹1.03 lakh crore over 2024-25 (RE).
• However, this is nearly the same as the ₹11.1 lakh crore estimated in the previous budget.

Need for Higher Economic Growth

• The budget aims to accelerate growth and push India towards developed country status.
• A real GDP growth rate of 8% is considered necessary to achieve this goal.
• While several measures introduced in the budget are beneficial, some could have been implemented earlier.
• Income tax relief for the middle class is expected to boost demand, but its effect depends on household consumption behavior.

Non-Tax Revenues

• Non-tax revenues, mainly from RBI and public sector dividends, increased to ₹3.25 lakh crore in 2025-26, up by ₹35,715 crore from 2024-25 (RE).
• Overall, non-tax revenue increased from ₹5.3 lakh crore (RE) to ₹5.8 lakh crore in 2025-26 (BE).

Government Expenditure and Fiscal Consolidation

• Declining Government Expenditure: The government’s spending as a share of GDP is set to decrease due to efforts to manage the fiscal deficit.
• Slower Expenditure Growth: Government spending is growing at a slower pace than the overall economy.
• Improved Spending Quality: A greater portion of government funds is being directed toward long-term investments in infrastructure.
• AI Investment Importance: Strengthening AI infrastructure is crucial as global leaders like the U.S. and China are advancing rapidly in this sector.
• Need for AI Incentives: The government should consider tax benefits to boost AI research and development in India.

Concerns Over Fiscal Transparency

• Shift in Fiscal Focus: The budget moves away from using the fiscal deficit as the main measure of financial discipline.
• Previous Target: Earlier, there was a clear goal to reduce the fiscal deficit below 4.5% by 2025-26.
• New Approach: The focus is now on lowering the debt-to-GDP ratio instead of setting a specific fiscal deficit target.
• Lack of Clarity: The new strategy is unclear, as it depends on different economic growth scenarios.
• Need for a Clear Target: A defined fiscal deficit goal would help maintain financial discipline and prevent excessive government borrowing, which can impact private investment.

Conclusion

• The Budget 2025-26 aims to sustain economic growth while maintaining fiscal discipline.
• Capital expenditure remains a priority, but AI infrastructure investment needs more focus.

2. A green signal for India to assert its health leadership

(Source – The Hindu, International Edition – Page No. – 8)

India’s Vision for Health Care and Innovation

• The Union Budget 2025-26 focuses on strengthening India’s health-care sector by improving medical infrastructure, expanding educational opportunities, and promoting global collaboration.
• With a total allocation of ₹90,958 crore for health care, the government is prioritizing accessibility, affordability, and quality in medical services.
• The introduction of 75,000 new medical seats over the next five years, including 10,000 seats in FY26, reflects India’s commitment to addressing the shortage of health-care professionals.

India’s Transformation in Health Care

• Over the past few decades, India has made remarkable progress in health care, moving from limited infrastructure in the 1980s to becoming a global leader in medical services.
• The ‘Heal in India’ initiative aims to position India as a preferred medical destination for international patients by improving hospital infrastructure and simplifying visa procedures.
• The ‘Heal by India’ initiative focuses on training and deploying Indian health-care professionals abroad to address global shortages while creating new employment opportunities.

Strengthening Cancer Care and Affordable Medicines

• Recognizing the growing burden of non-communicable diseases, the Budget provides for the establishment of 200 day-care cancer centres in district hospitals.
• These centres will enable early diagnosis and treatment, improving survival rates and reducing the cost of care.
• Customs duty exemptions on 36 life-saving drugs, including those for cancer, rare diseases, and chronic conditions, will make critical treatments more affordable.
• The addition of 13 new patient assistance programs will further help patients, especially those with chronic illnesses, in accessing essential medicines.

Technology and Innovation in Health Care

• The Budget emphasizes the role of Artificial Intelligence (AI) and digital health in advancing medical research, diagnostics, and treatment.
• National Centres of Excellence will be established to drive innovation, enabling India to develop cutting-edge medical solutions.
• Private hospitals, alongside government initiatives, have played a crucial role in bringing advanced health-care technologies to India.
• Apollo Hospitals introduced Proton Therapy for advanced cancer care, attracting patients from countries such as Australia and the UK.

India’s Leadership in Global Health Care

• India’s health-care sector is now a key pillar of national growth and development.
• By combining the strengths of Heal in India, Heal by India, and technology-driven innovation, the country is setting new benchmarks in global health care.
• Continued investment in medical education, infrastructure, and technological advancements will help India further strengthen its position in global health care.
• The focus remains on ensuring that high-quality medical services reach every individual, both within the country and beyond.

Conclusion

• India is not only improving health care for its own citizens but also contributing to global health solutions.
• The Budget lays a strong foundation for further progress by integrating technology, expanding education, and enhancing medical infrastructure.
• It is now a collective responsibility to build on this momentum to ensure accessible and world-class health care for all.