DC Edit | Budget Underwhelming, A Huge Missed Opportunity
Finance Minister Nirmala Sitharaman has presented a lackluster Budget that can at best be considered a work-in-progress policy document that does not demonstrate the resolve of a country in the midst of unprecedented global economic uncertainty. The BJP-led NDA government appears to have acted more cautiously than decisively, and as a result squandered the opportunity to drag the country into tough reforms, especially in rural areas.
Ms. Sitharaman continued fiscal consolidation by reducing the fiscal deficit to 4.3 percent in fiscal 2026-27 from 4.4 percent in fiscal 2025-26. Similarly, it did not splurge on either populist policies or growth-oriented capital expenditures. Despite Operation Sindoor, capital expenditure rose only from Rs 11.11 lakh crore to Rs 12.2 lakh crore in FY26.
This is the kind of fiscal discipline that global investors and credit rating agencies want governments to have. But the Budget has one major flaw: its business-as-usual approach. India cannot buy time as protectionism rises and major powers force middle powers to choose sides; He must get his house in order and make himself attractive to investors.
Apart from offering tax breaks to data centers established by foreign investors, the budget had nothing significant in terms of either incentives or reforms. The finance minister could have taken various steps to improve the operational efficiency of companies without spending from public finances.
Faster legal enforcement of contracts, for example, would greatly improve India’s ease of doing business metrics. No steps have been taken to reduce the gatekeepers and rent seekers who increase the cost of production in India. Similarly, reforming the old agricultural distribution system could save farmers thousands of crores.
Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) received the largest allocation in the budget at 2,27,429 billion rupees, which is second only to debt servicing. The aim of this program was to provide 5 kg of free food grains to economically poor people. However, 80 million people, representing 50 percent of the population, benefit from this service. Stricter enforcement of such freebies to people or companies would allow the government to spend that money more wisely elsewhere.
On matters of education and skills the minister has shown a lack of imagination. Instead of reforming education to make youth employable, he proposed setting up 15,000 content creation institutes; This was contrary to the Economic Survey’s assessment that high mobile usage negatively impacts young people’s career prospects.
The government also appears to have slowed down its push for non-fossil fuel vehicles by reducing monetary support under the PM e-vehicle scheme while increasing the Production Linked Incentive (PLI) for general automobile categories. India cannot achieve global power status unless it reduces its dependence on foreign fuel. It is not enough to wish for India to have a vishwaguru without a concrete plan of action to achieve this. Time stops for no one; It’s time the BJP government learned this.
