The world, particularly the rich and the powerful, could not care less about India’s election schedules. Nor are policies made elsewhere timed to roll out to fit the narrative of politicking in India
The “never before” tagline of the Narendra Modi government, repeated ad nauseam in election season and out of it, as a measure of its successful handling of India’s chronic economic, social and political problems has become threadbare through overuse. This peculiarly stuck-in-the-mud, frog-in-the-well perspective of comparing then with now has its uses during electioneering to distract a population that prefers to feign ignorance or unfamiliarity with the jargon in which India’s economy is explained in Budget season.
The world, particularly the rich and the powerful, could not care less about India’s election schedules. Nor are policies made elsewhere timed to roll out to fit the narrative of politicking in India. There may have been talk in certain quarters across the world that India needs to get over its policy paralysis, but no one is waiting for the arrival of that moment of illumination followed by appropriate action from the Modi government.
The Budget’s grand unveiling, a tradition that has sustained public interest for decades, is not an unimportant or routine annual ritual by the Union finance minister on behalf of the government in power. It has consequences just as it raises expectations till the moment its details are disclosed.
Despite finance minister Nirmala Sitharaman’s largesse of Rs 1 lakh crores to the two per cent of the 1.4 billion Indians who actually pay taxes, the response of the “middle class” that never had it so good (before) is, to say the least, lukewarm. The shopping malls, automobile showrooms, the sort of buzz in the air that can be felt and which shows up in how the stock markets respond the day after is missing. The media is not saturated with stories of people going on shopping sprees with the extra money they will get from Budget 2025-2026.
The mood is not buoyant. The “animal spirits” are “dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation”, as John Maynard Keynes spelt it out in his general theory of employment, interest and money. There is low expectation that the panel set up to boost manufacturing will do what it must to prevent enterprises from fading and dying, “though fears of loss may have a basis no more reasonable than hopes of profit had before”. A cursory reading of the Budget shows how the economy is doing; the government is not spending more but is spending less money on boosting agriculture regardless of the spiel it trots out. It is not spending more money on improving the quality of education or healthcare, and now it is working on how to get the private sector to invest more on infrastructure projects within the next three years.
The country’s economy is not yet broke, but it is faltering. This is at a time when it needs to be doing the opposite. It’s pointless to declare that India under Modi will leverage the domestic market to sustain and speed up growth, when the reality is that it must leverage its potential to trade with the world, not by sending talented or even unskilled or under-skilled Indians overseas but by manufacturing things that the world will desire.
If Ms Sitharaman had spared a little time in her bullet train speed delivery of her bullet-point budget for 2025-2026, on how India sees and prepares to tackle two things, first, the rate of growth roadblock the economy seems to have it because of the policy failures over the past 10 years and, the second, immediate impending crisis as India needs to prepare for the near certain confrontations over tariffs and its ripple effects vis-à-vis the United States, movers and shakers of the economy and the common man may have felt a bit reassured.
In one sense, the never-before scenario is correct; never before has India’s economy faced a global economic environment as unpredictable, turbulent and difficult to navigate as the Modi 3.0 government must with Donald Trump as President of the United States. Trade and tariffs are a starting point on why the response of all sectors and segments of the economy lacks enthusiasm. If no sector or segment of India’s working population, that includes everyone from billionaires, investors, corporate honchos down to the zero-hour contract employee within the expanding pool of unorganised gig workers, buys the story that they will be better off in 2025-2026 relative to the previous year, then Modi 3.0 needs to take a reality check.
The fundamental question is simple; when different segments of the Indian economy tot up their budgets, is the outcome happiness or misery? In sum, if income is higher than expenditure, then “result happiness”; if it’s the other way around, then “result misery”, as Charles Dickens wrote in David Copperfield.
This, that is 2025-2026, is not the time for hypothetical scenarios of the “Viksit Bharat 2047” kind. The reality is that people have borrowed money against gold, as a last resort, and there is a 30 per cent increase in defaults on those loans. People have drifted back to their villages as opportunities for earnings in urbanising locations have shrunk. As President Droupadi Murmu put it, real wages have not risen to keep pace with inflation. The Economic Survey said India needs to create 78.5 lakh non-farm jobs annually. Dependence on the farm sector has gone up; instead of declining as it was till 2018, the share of agriculture in the workforce reversed and has now gone up to 46.1 per cent in 2024.
There is so much the Modi government deliberately chooses to ignore that needs to be fixed in the economy. In order to even begin that exercise, the government has to face up to its policy paralysis.
Hard as this may be, the easy way out that the government has taken is obviously not going to produce positive results.
If the Budget was not a list of pronouncements as it has become in recent years, solutions have to be found and spelt out in some detail for the sentiment to change from low to high. The challenge for the Modi 3.0 government is to get the Indian economy moving at a rate faster than it has been in the previous year certainly, but also over the last 10 years. The Budget and the Economic Survey (that most of the general population does not read) made it quite clear: India is not set to grow at a rate faster than it did in 2024-2025. The slower pace affects everyone.
Shikha Mukerjee is a senior journalist based in Kolkata
