The ninth consecutive and record-setting Union Budget of Finance Minister Nirmala Sitharaman was the first without the backdrop of usual macroeconomic concerns - either about anaemic growth or high inflation - that have dogged most FMs. In fact, given that economic growth is projected at a very impressive 7.4% in 2025-26 and retail inflation plumbing an unprecedented low of 1.33% in December, the Indian economy is experiencing the so-called 'Goldilocks' moment - neither too hot, nor too cold, perfect.
The Finance Minister exploited this rare opportunity to share a national blueprint to strengthen the foundations of the Indian economy, which commits the government to pursue domestic reforms and accelerate the ongoing decentralisation - a strategy that cements India as the landing stage for the next phase of growth.
No surprises then that the downside of shunning instant gratification - an expectation sharpened by the social-media era's demand for headline-ready Budget sops - and placing the wager on long-term growth drew a negative reaction from the markets.
The truth is that enhancing the Indian economy to realise the audacious ambition of becoming a developed economy in the next 21 years entails unglamorous work: fixing the plumbing of the economy and cities, restoring the credibility of regulators, deepening financial and consumer markets, improving the quality of education, ensuring the predictability of taxes, seamless logistics, instilling the discipline of governance, and last but not the least, dealing with the political opposition. The outcome of this rather boring heavy-lifting, if pursued, will be a stronger Indian economy - the best defence against frequent geopolitical disruptions, something that is rapidly becoming the norm rather than the exception.
Rebalancing the Fisc
Reclaiming fiscal control - manifesting in reduced government debt - is what allowed Sitharaman the space to focus on renewing the economic foundations of the country. In fact, this admirable fiscal management is now part of her legacy as Finance Minister.
In 2020-21, in the aftermath of the Covid-19 pandemic, which led to the Indian economy contracting by 24.4% in the first quarter of the year, the fiscal deficit had climbed to a staggering 9.2% of gross domestic product. Thanks to a combination of prudent spending - focusing on capital expenditure, which has an inherent multiplier effect on growth, and targeted social welfare spending by triangulating the beneficiary based on their Jandhan-Aadhaar-Mobile, because of which the exchequer saved a cumulative sum of Rs 3 lakh crore - Sitharaman was able to commit the country to a glide path. Not only did she halve the fiscal deficit to 4.4% in a span of five years, but she has also committed to lowering it further to 4.3% next year.
Prudent fiscal management has a very positive fallout for the Reserve Bank of India (RBI) in managing inflation - its primary objective. Fiscal slippage means more government borrowing, which, if not managed, crowds out the private sector and raises the cost of borrowing in the economy. And the outcome is there for all of us to see. The only question is whether retail inflation, too, like economic growth, has discovered a new trend rate.
The Wager
Every government gets one defining economic wager. In the case of previous regimes, it was already decided by inclement macroeconomic circumstances. The difference with the National Democratic Alliance (NDA) is that they have, through some hard work, earned the right to make their own choice: Viksit Bharat by 2047.
Therefore, this year's Budget is best not read merely as an annual fiscal statement. Instead, it is an important waypoint in the next stage of growth of the Indian economy. Essentially, it seeks to answer the most vexing question that has dogged policy makers forever: how does a nation of such immense aspiration and potential finally master the art of conversion? Especially, since India, in the past, has always flattered to disappoint. Not on one occasion, but several.
India has never suffered from a shortage of ambition or talent. What it has struggled with, across decades, is the statecraft that can turn promise into productivity, growth into jobs, redistribution into dignity, and policy intent into institutional delivery. The Finance Minister said as much in her speech - that the NDA intends to check all these boxes and transform aspiration into achievement and potential into performance, while ensuring that the dividends of growth benefited everyone.
Framing the Finance Minister's speech in this way signals a subtle shift in the role of the state. This government is no longer positioning itself merely as a dispenser of welfare or a passive facilitator of markets. It is reclaiming the harder role of performance enabler - building platforms, absorbing risks where and when markets cannot, and nudging the economy up the value chain. Exactly what was prescribed in the Economic Survey, released last week; it argued that the state needs to evolve into the role of an entrepreneur.
The clearest expression of this new intent is the big boost to industrial policy. This Budget proposes scaling up manufacturing across strategic sectors, anchored by multi-year interventions. For instance, Biopharma SHAKTI, backed by ₹10,000 crore, proposes to make India a global hub for biologics and biosimilars, moving beyond low-cost generics into high-value health manufacturing.
Semiconductors follow a similar logic, with ISM 2.0 expanding the ambition from assembly into equipment, materials and full-stack Indian IP. Rare earth corridors, chemical parks, container manufacturing, hi-tech tool rooms and capital goods ecosystems point to the same underlying recognition: services-led growth alone will not deliver developed-economy wages at scale. Ensuring depth in manufacturing is not an option, but an imperative.
While continuing to commit more resources for capital investments to sustain the economy's growth momentum, the government signalled alternative means to ensure India Inc reclaim its lost investment mojo. The proposed Infrastructure Risk Guarantee Fund is an attempt to crowd in private investment by absorbing part of the early-stage risk.
The renewed emphasis on freight corridors, waterways, coastal shipping and high-speed rail growth connectors is building domestic competitiveness in a world where trade is harder, supply chains are weaponised, and logistics efficiency is the new industrial policy.
This is therefore not a Budget of giveaways. Neither is it an accounting exercise. It is a statement of both intent and direction. In previous essays, the NDA gradually reset the ideological contours by transitioning India from an entitlement to an empowerment regime. It did so by providing saturation coverage of basics like electricity and cooking gas, banking 50 crore people, and lifting 25 crore people out of abject poverty.
In the process, it created 50 crore new stakeholders who are inside the Indian economy, looking out. They are no longer a social welfare problem. Instead, they are the solution that will inspire India's growth ambitions.
If anything, Sitharaman has raised the bar for the NDA. The government will have to ensure against capture of industrial policy by lobbies, stalemates forced by the political opposition, ensure skills keep pace with technology, and inclusion transforms into economic mobility and not dependence.
The next 21 years, therefore, will test the NDA's ability to execute. Because 2047 will not reward intent, but only prize outcomes.
(Anil Padmanabhan is a journalist who writes on the intersection of politics and economics.)
Disclaimer: These are the personal opinions of the author
