AA Edit | Budget Underwhelming, A Huge Missed Opportunity
Except for offering a tax holiday for data centres set up by foreign investors, the Budget had nothing worthwhile, either in terms of incentives or reforms. The finance minister could have undertaken various steps to improve the operational efficiency of companies without spending from the public exchequer
Finance minister Nirmala Sitharaman has presented an underwhelming Budget, which at best can be considered a work-in-progress policy document that does not show the resolve of a country that is in the midst of unprecedented global economic uncertainty. The BJP-led NDA government appears to have been guided by caution rather than resolve, and as a result, it wasted an opportunity to nudge the country towards difficult reforms, especially in rural areas.
Ms Sitharaman continued fiscal consolidation by lowering the fiscal deficit to 4.3 per cent in the financial year 2026–27 from 4.4 per cent in the fiscal year 2025–26. Similarly, she did not splurge on either populist policies or growth-focused capital spending. Despite Operation Sindoor, capital expenditure grew merely from Rs 11.11 lakh crore to Rs 12.2 lakh crore in FY26.
This is the kind of financial discipline that global investors and credit rating agencies want governments to have. However, the Budget suffers from one major defect — its business-as-usual approach. When protectionism is rising, and great powers are forcing middle powers to choose sides, India cannot buy time; it must set its house in order and make itself attractive for investors.
Except for offering a tax holiday for data centres set up by foreign investors, the Budget had nothing worthwhile, either in terms of incentives or reforms. The finance minister could have undertaken various steps to improve the operational efficiency of companies without spending from the public exchequer.
Faster legal enforcement of contracts, for instance, could have improved India’s ease of doing business metrics immensely. No steps were taken to reduce gatekeepers and rent-seekers, who increase the cost of production in India. Similarly, reforming the archaic agricultural distribution system could have unlocked thousands of crores for farmers.
The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) got the biggest allocation in the Budget at Rs 2,27,429 crore, which is second only to debt servicing. This scheme was intended to provide 5 kg of free food grains to people from economically poor backgrounds. Yet, 80 crore people — representing 50 per cent of the population — are availing it. Tighter implementation of such freebies — granted to people or companies — could have allowed the government to spend this money more wisely elsewhere.
On the education and skilling fronts, the minister showed a lack of imagination. Instead of reforming education to make youth employable, she offered the setting up of 15,000 content creation institutes, which is contrary to the Economic Survey’s assessment that higher mobile use is adversely affecting youth’s career prospects.
The government also appears to have slowed its push for non-fossil fuel vehicles, as it reduced monetary support under the PM e-vehicle scheme while increasing the Production-Linked Incentive (PLI) for the general categories of automobiles. Unless India reduces its dependence on foreign fuel, it cannot acquire global power status. It is not enough to merely wish for India to become a vishwaguru without a concrete action plan to work towards achieving it. Time doesn’t stop for anyone; it’s time the BJP government learns this.