I have a confession that will horrify people who consider television panels a form of economic research: I read expenditure statements. They are dull, repetitive and much more revealing than the applause lines in a Budget speech. A government can promise jobs, justice, prosperity and several varieties of empowerment before lunch. The tables tell us whether it intends to build an asset, fund a recurring obligation or merely rename an old scheme. That is why I remain broadly sympathetic to the Narendra Modi government’s economic direction even when its public messaging becomes insufferably triumphant. Its strongest case is not a catchphrase. It is the gradual shift towards public investment, formalisation and cleaner government balance sheets.
The Union government’s recent budgets have treated capital expenditure as an organising principle rather than a decorative appendix. Readers can inspect the underlying allocations in the Finance Ministry’s official Budget portal and the detailed 2025-26 expenditure profile. The documents are not proof that every rupee is wisely spent; no budget document can establish that. They do show a government choosing roads, railways, logistics, housing and public assets while trying to keep the fiscal deficit on a downward path. That combination deserves more credit than it receives from an opposition still prone to treating any restraint on untargeted spending as ideological cruelty.
Concrete is not a substitute for reform, but it helps
The best argument for public capital expenditure in India is not that flyovers make attractive drone footage. It is that the Indian state can absorb risks private investors will not initially take. A freight corridor, highway connection or upgraded port changes the economics of factories located around it. Faster logistics reduce inventory costs; reliable movement makes smaller cities plausible production centres; construction creates demand before the longer-term productivity gains arrive. None of this is glamorous to the professional nostalgist who remembers every Congress slogan but somehow forgets the decades in which projects were announced, litigated, delayed and announced again.
I do not claim the Modi government invented infrastructure. Governments before 2014 built roads, expanded telecommunications and created institutions that later administrations used. Adults should be able to acknowledge continuity without surrendering judgment. The relevant distinction is one of priority, pace and administrative attention. This government has made physical infrastructure central to its political identity, monitored projects from the top and accepted that visible execution is itself a form of welfare. A bridge that shortens a worker’s commute is not less socially useful because it does not arrive as cash in an envelope.
The opposition’s standard rebuttal is that capital-intensive growth has not generated enough secure employment. That criticism contains truth. Construction work can be precarious, manufacturing’s share has not risen as dramatically as successive governments promised, and many educated young Indians are trapped between degrees and disappointing opportunities. But the leap from “the employment outcome is inadequate” to “public investment is misguided” is lazy. India will not create durable jobs by allowing freight to crawl, power to fail or urban infrastructure to disintegrate. Capital expenditure is a necessary platform, not a self-executing employment guarantee.
The government’s error is occasionally to speak as though laying the platform completes the building. It does not. Land markets remain distorted, municipal governance is weak, court delays punish contracts, and small businesses still encounter a thicket of compliance. A minister inaugurating a highway should be congratulated for the highway and then asked why a small manufacturer needs heroic patience to resolve a tax dispute. Sympathy is not exemption from scrutiny. Indeed, a reform-minded government should be judged more harshly when it tolerates administrative habits that contradict its own ambitions.
The fiscal argument the opposition avoids
Congress rhetoric often implies that every social problem can be met with a new entitlement whose trade-offs are impolite to mention. The party is entitled to favour a larger redistributive state. It is not entitled to pretend borrowing has no opportunity cost. Interest payments consume fiscal space that could support health, defence, infrastructure or targeted assistance. A government that combines welfare delivery with deficit reduction is attempting a more difficult balancing act than the television caricature of a regime indifferent to the poor.
The Modi years have also demonstrated that welfare and state capacity need not be opposites. Bank accounts, digital transfers, sanitation, household electrification and subsidised food can coexist with capital spending. I have reservations about inflated claims, shifting definitions and the temptation to count an announced connection as a permanently reliable service. Still, the administrative model is recognisably different from the Congress-era habit of designing leakage-prone programmes and then treating expenditure itself as moral achievement. Money allocated is not a life improved.
Critics argue that headline capital expenditure can flatter reality because allocations to states, public enterprises or asset-creation grants are grouped in ways ordinary readers rarely inspect. Fair enough. That is precisely why citizens should read the classifications and compare budget estimates, revised estimates and actual spending. Underspending matters. So does maintenance. India has a weakness for cutting ribbons and a poor appetite for paying to preserve what it builds. A road ruined by drainage failures is not transformed into sound policy because its original tender appeared under the correct accounting head.
My answer is more transparency, not a retreat to revenue-heavy populism. Ministries should publish project-level milestones in accessible formats. Cost overruns and altered deadlines should be visible without forcing citizens through unusable portals. Parliament’s committees should examine outcomes rather than stage partisan theatre over vocabulary. State governments, including BJP governments, should stop treating maintenance budgets as dispensable. The capital push becomes credible over decades only when assets remain productive after the cameras leave.
Tax relief and the politics of confidence
The other worthwhile instinct in the government’s economic approach is its recognition that the salaried middle class cannot forever be treated as an inexhaustible cash machine. Direct-tax relief is frequently mocked as politics for a narrow constituency. That misses the point. Households facing school fees, rent, insurance and elderly care make real choices about consumption and savings. Letting them retain more income can support demand without creating another permanently administered subsidy architecture.
I would go further. The tax system needs predictability more than annual gifts. Citizens should not require a decoder ring to compare regimes, exemptions and deductions. Businesses need fewer disputes and quicker closure. GST, for all its historic value as a common-market reform, still carries too many rates and too much procedural friction. Giving the government credit for implementing a reform Congress discussed but could not politically deliver does not mean pretending the implementation is immaculate. The next phase must be simplification rather than perpetual tinkering.
There is also a political lesson here. Reform survives when citizens can identify a benefit in their own lives. Macroeconomic stability is vital but abstract. A completed expressway, a faster tax refund or a lower monthly deduction is tangible. The BJP understands this connection better than its opponents, who often describe voters as victims of propaganda whenever those voters notice an improvement the commentariat had discounted. People are capable of holding two thoughts: a railway station may be better, and finding a good job may still be hard.
What a serious second act requires
The government should resist three temptations. First, it must not confuse production incentives with permanent industrial policy. Support should expire, performance must be measured, and failure cannot be protected indefinitely. Second, it should not allow tariff policy to become a shelter for firms that never become competitive. Third, it must rebuild statistical trust. Delayed surveys, contested series and data gaps give critics an opening the government has no reason to provide. Confidence grows from institutions that can report uncomfortable facts.
States are equally important. New Delhi can finance corridors, but cities decide whether factories have water, workers have transport and neighbourhoods can absorb migration. India’s mayors remain administratively weak while chief ministers hoard authority. If the BJP genuinely believes in accountable execution, it should champion empowered urban government even where local politics becomes inconvenient. Centralisation can accelerate a flagship project; it cannot manage every drain, bus route and building permission in a continent-sized country.
The Congress response should be to offer a better theory of investment, employment and federal execution. Instead, it too often reaches for nostalgia: an invocation of liberalisation, an old rights-based law and a reminder that institutions existed before Modi. All true, all insufficient. Voters do not owe a party perpetual royalties for reforms undertaken three decades ago. They want to know what it would build now, what it would stop spending on and how it would make the state work better.
My verdict is therefore supportive but conditional. The capital-expenditure strategy is the right spine for Indian economic policy. Fiscal consolidation, targeted welfare and infrastructure can reinforce one another. Yet the government must now convert physical connectivity into broad private investment, better jobs and stronger cities. It should welcome measurement because a project that works can survive a spreadsheet. The opposition may prefer the emotional comfort of alleging that nothing has changed. I prefer the less cinematic task of checking the tables. They show progress, unfinished work and a reform case far stronger than either the government’s slogans or Congress’s nostalgia.
