I read Budget documents because somebody must, and because the televised version of a Budget is usually a poor substitute for the thing itself. Television wants a dramatic winner, an aggrieved loser and a slogan before lunch. Public finance is less obliging. It is a long argument about priorities, constraints and the kind of economy a government believes India can become. Read that way, the 2026–27 Budget is not thrilling. I mean that as praise.
The broad case made in the official Budget speech is familiar: preserve stability, continue investing, deepen manufacturing and resist treating the exchequer as an election-season sweet shop. Congress and much of the opposition commentariat regard this as evidence of insufficient imagination. Their preferred imagination tends to arrive in the form of a cheque written by a future taxpayer. I have seen this film before, usually followed by complaints that private investment is weak, borrowing costs are high and the state lacks money for infrastructure.
Restraint is a policy, not an absence of one
The fashionable criticism is that a government with political confidence should spend more aggressively. That sounds bold until one asks what “more” means, who receives it and whether the expenditure creates productive capacity or merely a recurring obligation. India certainly requires a functioning welfare state. It does not require an auction in which parties compete to detach benefits from any honest discussion of revenue.
I give the Modi government credit for understanding that roads, freight systems, power networks, defence production and industrial capacity are not merely line items. They change the set of things households and businesses can do. A transfer may help a family meet this month’s bill, which is sometimes necessary. Reliable transport, electricity, digital systems and employment-intensive investment can alter that family’s choices for years. The distinction is not morally glamorous, but it is economically decisive.
The government’s critics often reply that capital expenditure does not automatically become jobs. Correct. A badly chosen project can become concrete without productivity. Procurement can be slow, state capacity uneven and land disputes ruinous. The answer, however, is to improve project selection and execution, not to pretend that consumption subsidies are an industrial strategy. I would like the Budget debate to spend less time asking whether the headline allocation is sufficiently large and more time examining completion rates, maintenance obligations and the quality of assets created.
The official Receipt Budget is the useful antidote to political fantasy. It reminds readers that revenue has sources, debt has costs and every permanent promise competes with another claim. Opposition manifestos regularly speak as if the same rupee can finance income guarantees, loan waivers, expanded subsidies, government recruitment and lower taxes. Arithmetic is the least ideological participant in politics. It refuses to join the alliance.
Manufacturing cannot remain a photo opportunity
Where I am less indulgent toward the government is implementation. “Make in India” has moved beyond being merely a slogan in several sectors, but final assembly is not the same thing as technological depth. India must capture more value in components, tooling, materials, design and industrial machinery. The government knows this; the problem is that announcements travel faster than supplier development.
The correct direction is visible in electronics, defence and transport equipment. Yet industrial policy succeeds only when it becomes boring: predictable tariffs, dependable logistics, commercial dispute resolution, skilled technicians, stable power and officials who can distinguish a serious manufacturer from a subsidy hunter. Ministers naturally prefer inaugurating plants. I would prefer them to obsess over why a mid-sized component maker spends months securing approvals or why an exporter cannot forecast an input duty two years ahead.
This is also where the right should resist congratulating itself too soon. Production-linked incentives can attract scale, but incentives are scaffolding, not architecture. A factory that survives only while the state pays it is not evidence of competitiveness. The test is whether firms develop local suppliers, increase productivity, export without permanent protection and train workers whose skills remain valuable beyond one assembly line.
Congress’s answer is often to sneer that the gains belong to large companies. That is politically convenient and economically shallow. Large anchor firms can create orders for thousands of smaller suppliers, provided competition policy, finance and procurement systems prevent closed networks. India will not industrialise through boutique workshops alone. Nor should industrial policy become a private club for a few conglomerates. The serious position is to welcome scale while demanding contestability.
The welfare argument deserves more honesty
I do not accept the caricature that fiscal discipline is indifference to the poor. Inflation, unstable borrowing and weak public investment punish poorer households first. A wealthy family can hedge, relocate money or buy private substitutes. A daily-wage household cannot negotiate with food prices or a broken bus route. Stability is social policy, even when it does not produce an emotional campaign advertisement.
That does not absolve the Centre of hard choices. Nutrition, primary health, school quality and urban services require sustained attention. I would gladly trade a vanity project, an inefficient subsidy or a poorly targeted tax concession for stronger frontline delivery. The BJP’s political temptation is to centralise credit around visible national schemes. But a clinic works because a nurse arrives, medicines are stocked and a district administrator fixes failures. The Centre must measure outcomes without imagining that a dashboard substitutes for a functioning institution.
The opposition has one legitimate point: aggregate growth does not guarantee broad confidence. Young Indians judge the economy through wages, examinations, apprenticeships and the plausibility of moving into a better job. If the government talks only in investment totals, it risks sounding as remote as the economists it once criticised. The answer is not Congress-style nostalgia for an era when scarcity was administered with solemn vocabulary. It is a more demanding second generation of reform focused on firm creation, labour mobility, vocational credibility and city governance.
I also want cleaner tax administration. A widening tax base is necessary, but citizens should not experience compliance as a guessing game. Stable rules and swift appeals matter to salaried taxpayers and small businesses just as much as headline rates. A government confident enough to formalise the economy should be confident enough to make the tax state less arbitrary.
Reform is cumulative, which makes it hard to sell
The most useful reforms rarely fit into a rally sentence. Insolvency rules, digital public infrastructure, logistics upgrades, direct transfers and formalisation produce mixed results at first, generate unintended consequences and improve through iteration. Congress’s preferred rhetorical trick is to identify every imperfection as proof that the underlying reform failed. By that standard, no state would ever modernise.
The BJP has the opposite weakness: it sometimes treats criticism of implementation as hostility to the project. That reflex is unnecessary. A government that has been in office for more than a decade cannot blame every bottleneck on inherited paralysis. It now owns both the advances and the administrative frictions. Supporters should say so plainly, because credibility is worth more than applause.
My verdict is therefore supportive but conditional. The Budget’s emphasis on stability, investment and productive capacity is sound. Its refusal to imitate the opposition’s open-ended entitlement bidding is responsible. But the next proof must appear in execution: completed infrastructure, deeper domestic supply chains, better municipal services and more pathways from education to paid work.
India does not need a Budget that makes every constituency cheer for forty-eight hours. It needs one that leaves the country with stronger balance sheets, better assets and greater productive freedom five years later. That is less exciting than the Congress habit of presenting redistribution as a substitute for growth. It is also considerably more respectful of the citizen, who is not merely the recipient of a scheme but the taxpayer, worker, saver and entrepreneur financing the entire performance.
I will take sober progress over expensive nostalgia. But sober progress must still be progress, measured outside the speech and beyond the government’s own publicity. That is the bargain this Budget asks Indians to accept, and it is a bargain worth accepting—with the accounts kept open.
