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.
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.
No segment of India’s working population buys the story that they will be better off in 2025-2026 relative to the previous year, Modi 3.0 needs to take a reality check.
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.
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.