I have an unpopular confession: I enjoy reading budget documents. Speeches supply the applause lines, but annexures reveal what a government believes when nobody is expected to be watching. India’s 2026-27 Budget is interesting for exactly this reason. Beneath the familiar language about growth, jobs and manufacturing lies a quieter attempt to remove accumulated clutter from the tax system. It is not revolutionary, and that is partly its virtue. Durable reform is often less cinematic than its critics demand.
The Congress response to any Narendra Modi government Budget now follows a weary script. If spending rises, the government is fiscally reckless. If it shows restraint, it is supposedly abandoning the poor. If taxes are simplified, relief is dismissed as cosmetic; if incentives support production, the policy is called cronyism before the factories have switched on. This reflex tells us more about an opposition searching for a vocabulary than about the documents themselves.
The reform is in the plumbing
Consider the proposal to make minimum alternate tax a final tax at a lower rate while protecting previously accumulated credit. The Finance Minister’s official Budget speech also sets out customs changes intended to remove old exemptions, correct inverted duties and place effective rates directly in the tariff schedule. Nobody will wave a flag for cleaner tariff architecture. Yet a business deciding whether to manufacture in India cares greatly about predictable input costs and fewer interpretive disputes.
This is where I give the government credit. The best economic reform is not always a dramatic privatisation or a midnight ceremony. Sometimes it is the patient reduction of exceptions that employ advisers, delay consignments and turn ordinary decisions into negotiations with the state. India’s old policy culture adored discretion because discretion made every ministry important. Rules that are legible and broadly applicable transfer importance back to citizens and firms.
The new Income Tax Act belongs to the same project. The Economic Survey for 2025-26 describes an Act focused on structural clarity and continuity, scheduled to take effect in the 2026-27 tax year. That phrasing will not thrill television studios, but continuity matters. India has spent too many decades changing forms, definitions and procedures while congratulating itself for reform. A cleaner statute that leaves legitimate commercial decisions undisturbed can do more good than another clever exemption.
Congress nostalgia avoids the actual record
Whenever the opposition invokes the supposedly more thoughtful economics of the UPA years, I ask which part we are meant to miss: retrospective taxation, stalled projects, policy paralysis, or the extraordinary power of intermediaries to make routine clearances mysterious? Congress did enact useful measures, and serious people should acknowledge them. But nostalgia has airbrushed the administrative culture that accompanied those measures.
The present government has not eliminated that culture. Tax officers can still be aggressive, portals can still behave as if the taxpayer exists to test software, and small firms still face a thicket of central, state and municipal compliance. My argument is not that the work is complete. It is that the direction—faceless processes, digitised records, rationalised rates and fewer special cases—is preferable to the Congress habit of announcing a grand entitlement while leaving implementation to discretionary machinery.
There is a fair criticism from the opposition that household demand cannot be treated as somebody else’s problem. Corporate balance sheets and headline growth do not automatically produce confidence at the kirana counter. The Survey records the substantial rise in listed-company profits and tax collections since the pandemic period. That is evidence of resilience, but it is not proof that every household feels prosperous. The government should resist confusing macroeconomic strength with universal comfort.
Still, the remedy cannot be permanent fiscal theatre. Congress and much of the INDIA alliance increasingly speak as if every economic anxiety can be answered by another cash promise financed by an unspecified somebody. Redistribution has a legitimate place in India. But when it becomes the entire intellectual programme, it stops being compassion and starts being an admission that the party has no theory of production.
Manufacturing needs discipline, not slogans
The government’s manufacturing push also deserves a more adult assessment. Production-linked incentives, tariff calibration and infrastructure spending have helped make India a more plausible part of global supply chains. They have not yet made us a manufacturing superpower. Too much domestic value addition remains shallow, logistics costs remain stubborn, and firms frequently import the most sophisticated components.
I support incentives when they purchase measurable outcomes: production, exports, skills, supplier development and technological capability. I oppose subsidies that become permanent compensation for inefficiency. The difference is not ideological; it is administrative. Every scheme should contain transparent milestones and a credible expiry. A protected infant industry that never grows up becomes a middle-aged lobby with excellent access to Delhi.
This is where the government could improve its political communication. Ministers often advertise investment commitments as if they were completed factories. Memoranda of understanding are possibilities, not machines. Approved projects are not equivalent to commercial production. Announced jobs are not salaries paid. A confident government should publish regular, scheme-level data showing promised investment, realised investment, domestic value added, employment and exports.
Such disclosure would also expose the emptiness of much opposition criticism. It is easy to call every incentive a giveaway when one refuses to distinguish between a functioning export plant and a proposal on a presentation slide. Better data would allow critics to identify genuine underperformance while preventing ideological opponents from pretending that industrial policy has produced nothing.
The overlooked political achievement
What strikes me most is how thoroughly the terms of debate have changed. A decade ago, economic policy discussions revolved around whether the state could clear a project without scandal or paralysis. Today the argument is about how quickly India can move from assembly to component manufacturing, how deeply it can enter supply chains and whether tax simplification is proceeding fast enough. That shift is itself an achievement of the current government.
The BJP sometimes weakens its case by treating every criticism as hostility. A sympathetic columnist should not help it maintain that habit. Businesses deserve fewer retrospective demands, taxpayers deserve functioning portals, and states deserve a stable share of policy responsibility. Reform must be experienced at the assessment desk, the port and the factory gate—not merely described from a podium.
But I will not join the fashionable claim that nothing has changed because every problem has not disappeared. That is the opposition’s preferred trick: set perfection as the benchmark, declare every incremental gain fraudulent, then offer policies borrowed from the era that produced many of the obstacles. India does not need to revive that administrative imagination.
The 2026-27 Budget should be judged over several years. Did tariff simplification reduce disputes? Did the new tax law shorten compliance time? Did incentives create suppliers rather than screwdriver assembly? Did investment broaden beyond a few large groups? Those are the questions I will keep asking. For now, the government deserves credit for doing the unglamorous work of economic plumbing. The pipes are not all clear, but at least Delhi is finally admitting that clogged pipes—not merely insufficient promises—hold growth back.
