I read budgets for the same reason some people watch Test cricket: the apparently dull passages reveal character. Budget 2026 reveals a government that has resisted the temptation to buy applause with a fiscal sugar rush. That matters more than the annual television ritual in which every tax slab is treated as a referendum on civilisation. As the Associated Press reported, the government paired higher infrastructure ambitions with a continued commitment to fiscal discipline. I see that combination as the real reform. A developing country cannot choose between building and balancing forever; it has to demonstrate that it can do both.
Congress criticism predictably describes every large capital programme as headline management and every restraint on giveaways as indifference. This is peculiar coming from a party whose nostalgia industry treats the pre-2014 economy as a lost Scandinavian paradise. India remembers stalled projects, policy paralysis and inflation rather less fondly. The present government deserves credit for making roads, railways, logistics and manufacturing capacity central to economic policy rather than decorative annexures. Capital expenditure is not automatically virtuous, but assets that lower the cost of moving goods and people can expand opportunity for years. A one-time transfer buys one season of goodwill; a functioning freight corridor changes the arithmetic of a district.
The reform is the combination
Fiscal prudence is often caricatured as an accountant’s obsession. I think that is lazy. When government borrowing becomes indiscriminate, private borrowers pay, interest costs consume future budgets and inflation punishes the poorest household first. Discipline is therefore not an elite aesthetic. It is a promise that today’s announcement will not become tomorrow’s emergency. The PRS monthly policy review is a useful antidote to television noise because it shows how much government is actually a sequence of rules, institutions and implementation decisions, not merely speeches.
I am not claiming that every rupee of capital expenditure is efficiently spent. Anyone who has driven past an unfinished flyover knows better. Project selection can be political, tendering can be slow and state capacity varies dramatically. My argument is narrower and stronger: the governing philosophy is correct. India should borrow primarily to create productive capacity, while steadily reducing the deficit rather than normalising permanent emergency spending. That is a more serious social contract than promising everything to everybody and leaving the bill to an unnamed future finance minister.
The opposition’s preferred vocabulary—inequality, demand, welfare—contains real concerns. Demand cannot be wished into existence, and growth that does not produce employment will eventually lose legitimacy. Yet those concerns do not logically require reviving the old model of leak-prone schemes, administered scarcity and political discretion. Better infrastructure is distributional policy when it connects a small manufacturer to a market, cuts a commuter’s travel time or makes an industrial investment viable beyond a metropolitan enclave. The Left dislikes this argument because it does not fit the cartoon in which public investment is compassionate only when it arrives as consumption.
Manufacturing requires patience, not magic
The budget’s manufacturing emphasis also deserves a defence more sophisticated than chanting “Make in India.” Industrial policy can fail; governments are poor venture capitalists when they protect incumbents indefinitely. But the alternative offered by many Congress-adjacent economists—import what is cheapest, provide broad welfare and wait for services to absorb labour—is not a credible employment strategy for a country of India’s scale. Manufacturing ecosystems take time. Suppliers follow anchor factories, skills follow predictable demand and logistics investments become worthwhile when production clusters reach critical mass.
I would prefer incentives tied more tightly to domestic value addition, research and supplier development. Assembly alone cannot be the destination. Nor should every politically connected sector receive a protective wall and call itself strategic. The government should publish clearer scorecards: investment delivered, jobs sustained, exports created, local components sourced and subsidy paid per outcome. Pro-government commentary becomes useless when it treats requests for measurement as betrayal. A confident reform administration should welcome measurement because results are its best reply to ideological sceptics.
That caveat does not rescue the opposition’s position. Congress frequently demands more spending, lower taxes, additional guarantees, higher procurement prices and faster deficit reduction in the same rhetorical afternoon. Arithmetic is not communal, neoliberal or anti-poor; it is arithmetic. If a party proposes a major entitlement, it should identify the tax, borrowing or spending reduction that finances it. The current government has not been perfect, but it has made fiscal glide paths and capital allocation part of ordinary political conversation. That is institutional progress.
What the government still owes us
Credit should not become a blank cheque. The government needs to accelerate disinvestment where the state has no strategic reason to operate a business. It should simplify the tax system beyond periodic relief and reduce the uncertainty caused by aggressive interpretation. It must also acknowledge that small firms experience compliance very differently from large corporations with legal departments. A portal that works beautifully in a presentation but rejects an ordinary trader’s filing without intelligible explanation is not digital governance; it is a queue with pixels.
I also want greater transparency about project outcomes. Announcing a highway length is not the same as demonstrating reduced logistics time. Sanctioning a railway station redevelopment is not the same as delivering it on schedule. Ministers should publish comparable completion dashboards and permit independent scrutiny. The BJP’s strongest claim is administrative execution. It should therefore be the party most willing to expose execution data, including failures. Concealing a delay merely lends ammunition to people who insist that every achievement is publicity.
There is a fair opposition argument about household stress. Food prices, precarious work and uneven wage growth are lived realities. The answer is not to sneer at those concerns, and government supporters should resist doing so. The answer is to distinguish relief from a permanent economic model. Targeted support during stress can be justified; a politics organised entirely around transfers cannot generate the productivity that ultimately pays for those transfers. Welfare must protect people while investment expands the number of productive choices available to them.
That distinction is what I find missing in Congress-era nostalgia. The old settlement offered citizens access to political discretion: a licence, waiver, connection or subsidy mediated through a gatekeeper. The emerging settlement, imperfectly realised, offers public infrastructure and digital rails on which individuals and businesses can act with less permission. The second model is not colder. It is more respectful because it treats citizens as economic participants rather than permanent petitioners.
Boring can be brave
Budget commentary rewards novelty, but sound fiscal government is repetitive. Build useful assets. Keep debt manageable. Improve the tax base. Protect the vulnerable without converting every election into an unfunded auction. Encourage production, then withdraw support from schemes that do not perform. None of this produces a cinematic reveal. It is nonetheless harder than announcing a universal promise whose costs appear outside the camera frame.
I understand why critics want a single transformational flourish. India’s ambitions are enormous and its frustrations immediate. But economies are rarely transformed by one speech. They are transformed when governments maintain direction across business cycles, correct failures and make credible commitments that outlast a news cycle. The Modi government’s economic record contains mistakes—demonetisation remains the most obvious example of disruption outrunning design—but it also contains a seriousness about infrastructure and formalisation that Congress’s retrospective storytelling cannot erase.
My verdict is therefore supportive without being devotional. The government should privatise faster, measure better and listen more carefully to small businesses and household distress. Yet it has chosen the correct spine for economic policy: public investment bounded by fiscal responsibility, manufacturing ambition disciplined by outcomes and welfare that does not pretend wealth can be distributed before it is created. The fashionable reaction is to ask why the budget was not more dramatic. I ask a less glamorous question: will it leave India with more productive capacity and fewer fiscal illusions? On balance, I think it will.
