Financial Sector & Governance

The budget focuses on strengthening fiscal federalism, financial sector reforms, municipal financing and trade facilitation.

It reflects a structured Kartavya-driven governance approach, positioning Yuva Shakti as a major driver of India’s long-term development vision.

Reform Area	Details
16th Finance Commission	The government accepted the recommendation to retain vertical tax devolution to states at 41%.
Banking Sector Review	A High-Level Committee on Banking will review the sector and align it with the needs of a Viksit Bharat.
Municipal Bonds	An incentive of Rs. 100 crore has been proposed for large cities issuing municipal bonds worth more than Rs. 1000 crore.
Customs and Trade Facilitation	The duty deferral period for Tier-2 and Tier-3 economic operators has been increased to 30 days to ease trade operations.
Governance Vision	The budget reflects a structured Kartavya approach to development, prioritising Yuva Shakti as a key driver of the Indian economy.

PT Facts

Finance Commission: Constitutional body under Article 280 that recommends tax devolution between Centre and States.
Vertical Devolution: Share of central taxes transferred from the Union to States.
Municipal Bonds: Debt instruments issued by urban local bodies to finance civic infrastructure.
Viksit Bharat: India’s long-term development goal for 2047.

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