I have never understood the ritual of judging a Union Budget by counting how many applause lines arrive in the finance minister’s speech. A budget is not a wedding buffet where every constituency must find its preferred dish before declaring the evening a success. It is an allocation of scarce money, administrative attention and political capital. By that measure, the most encouraging feature of the government’s present economic approach is also its least theatrical: it keeps returning to productive capacity. Infrastructure, logistics, manufacturing, formal credit and technological capability do not give television anchors much to shout about, but they are what determine whether India can sustain growth after the slogans and subsidies have been forgotten.
The government’s own Economic Survey portal lays out this longer view more honestly than most budget-day commentary. It treats competitiveness, resilience, employment, energy and technology as connected problems rather than isolated ministries. The documents available through the official Union Budget site likewise show why a serious assessment must extend beyond a single tax change. My argument is not that every scheme works beautifully. It plainly does not. My argument is that the direction—toward building rather than merely distributing—is substantially right, and Congress-era nostalgia offers no credible substitute.
Capacity is less photogenic than entitlement
For decades, Indian political debate rewarded governments for announcing claims on future income while paying remarkably little attention to how that income would be produced. The Congress system perfected the language of compassionate allocation. It was often better at naming a programme than delivering the road, electricity, port connection, land record or reliable municipal service that made private investment viable. That history is now repackaged as a lost age of inclusive policy, as though the licence raj, chronic infrastructure shortages and discretionary clearances were merely unfortunate footnotes. I do not buy it. A poor country cannot redistribute itself into prosperity when the productive base remains narrow.
The Modi government’s strongest economic instinct has been to recognise that public capital expenditure can crowd in rather than automatically crowd out private activity. A freight corridor is not a favour to one industrialist. A functioning highway, port or power connection lowers costs for thousands of firms, including firms whose owners will never attend a Delhi policy conclave. Digital public infrastructure has performed a similar role in payments and service delivery. None of this abolishes market risk or guarantees employment, but it changes the terrain on which entrepreneurs operate. That is a more durable form of welfare than keeping citizens dependent on an expanding catalogue of permissions and intermediaries.
Critics reply that capital-intensive projects do not create enough jobs. There is truth in the warning and laziness in the conclusion. A bridge itself will not employ a district forever, but the economic activity enabled by reliable transport can. The relevant test is therefore not the ribbon-cutting photograph; it is whether infrastructure connects productive clusters, reduces turnaround times and attracts complementary private investment. Government must publish those outcomes more consistently. When an industrial corridor underperforms, officials should say why. Credit-giving need not mean suspending measurement. In fact, a confident reforming government should be more willing than its critics to expose weak execution.
The missing-middle problem remains real
My reservation concerns the small firm that has graduated beyond informality but remains too modest to command a compliance department. India often speaks of micro, small and medium enterprises as one sentimental category. They are not one thing. A household workshop, a twenty-person supplier and a sophisticated export manufacturer face different constraints. Policy routinely celebrates them together and then hands them the same maze of filings, certifications, delayed payments and expensive working capital. Large companies can hire specialists to navigate that maze. The entrepreneur trying to make payroll on Friday cannot.
The government deserves credit for formalisation, credit guarantees and digital systems, but it must acknowledge the cumulative cost of interacting with the state. A rule may appear harmless when viewed from one ministry. Ten such rules, administered by different authorities and interpreted differently across states, become a tax on ambition. This is where the BJP’s reforming rhetoric should become more radical. Compliance must be designed around risk, with routine firms facing simple, predictable processes and enforcement concentrated on genuinely suspicious conduct. The object should be to make honest growth easier, not to make every business prove its innocence repeatedly.
Delayed payments deserve particular attention. Governments and large buyers routinely discuss MSME finance as if the only problem were the bank manager. Often the problem is that a smaller supplier has already delivered goods and is waiting months for money contractually owed. No credit scheme can fully repair a commercial culture in which the weaker party finances the stronger one without consent. Public procurement entities should face transparent payment dashboards and automatic consequences for chronic delay. If the state wants firms to formalise, it must demonstrate that formal contracts produce timely payment rather than merely better documentation of helplessness.
Manufacturing policy needs discipline, not embarrassment
The fashionable criticism of production-linked incentives is that any industrial policy amounts to picking winners. This would be persuasive if the alternative global economy were a seminar-room model of neutral states and frictionless trade. It is not. Major economies subsidise strategic industries, weaponise supply chains and attach national-security language to commercial policy. India would be foolish to remain doctrinally pure while competitors assemble ecosystems with public support. The correct question is not whether the state may encourage manufacturing. It is whether incentives are temporary, measurable and tied to actual incremental production rather than clever paperwork.
Here, transparency is the difference between policy and patronage. The government should publish sector-level assessments showing investment, domestic value addition, exports, employment and fiscal cost. It should also be willing to close schemes that fail. An incentive that becomes permanent is no longer a bridge to competitiveness; it is an annuity purchased by taxpayers. Indian firms must ultimately compete on quality, scale and innovation. Protection can buy learning time, but it cannot substitute for learning. I give the government the benefit of the doubt because it has correctly identified the strategic challenge. I will not give any ministry a blank cheque on execution.
The opposition’s response has been intellectually thin. Congress alternates between accusing the government of neglecting manufacturing and condemning every mechanism used to encourage it. It demands jobs while treating investment as morally suspect whenever a recognisable corporate name appears. This is not an economic programme. It is a press-conference strategy. India needs stronger competition policy, cleaner procurement and safeguards against concentration, certainly. But demonising scale will not create globally competitive Indian enterprises. The country cannot export indignation, however efficiently the INDIA alliance manufactures it.
Fiscal seriousness is a social policy
I also reject the notion that fiscal restraint is an accountant’s obsession imposed on the poor. High and unstable borrowing eventually appears as inflation, higher interest costs or reduced room for essential spending. The affluent can hedge against those consequences. The wage earner and pensioner cannot. A government that keeps deficits on a credible path is protecting future social expenditure from today’s political appetite. This does not mean refusing support during genuine distress. It means distinguishing emergency relief from a permanent bidding war in which parties promise benefits whose financing they prefer not to discuss.
State elections increasingly resemble auctions of recurring giveaways. The BJP participates in this competition too, and I wish it showed more resistance. There are circumstances in which targeted cash support is justified, especially where administrative capacity makes in-kind delivery wasteful. But parties should publish the multi-year cost and identify what will be taxed, borrowed or cut. A promise is not compassionate merely because its invoice arrives after polling day. The same standard must apply to the government I broadly support; otherwise fiscal conservatism becomes nothing more than a stick reserved for opponents.
What I want from the next stage is a sharper bargain: continued infrastructure investment, more aggressive deregulation for growing firms, disciplined industrial incentives, stronger urban governance and honest fiscal accounting. India’s bottleneck is no longer a shortage of entrepreneurial desire. It is the uneven quality of the systems surrounding that desire—courts, municipalities, logistics, skills and predictable regulation. Those are unglamorous reforms. They rarely fit on a campaign poster. They also determine whether a young firm becomes an exporter or remains permanently small.
The government’s economic record should be debated without incense or amnesia. It has made mistakes, including needless policy uncertainty and an occasional fondness for centralised announcement before local preparation. Yet its central proposition remains superior to the opposition’s: prosperity must be built through capacity, not summoned through rhetoric. I read budget documents because the tables reveal what speeches conceal. In those tables I see a state gradually shifting from dispensing scarcity to enabling production. The work is incomplete, sometimes clumsy and vulnerable to bureaucratic relapse. It is still the right work, and I would rather improve it than return to the comfortable stagnation now marketed as nostalgia.
