Beyond The Big-Bang Reform Illusion: A Mature Budget With Commitment, Consistency And Vision

Business media outlets and market experts often expect the “aha” moments from any budget. It’s not surprising, given the fact that this is the single biggest event of the year for business TV and also a major catalyst for new policies for the year ahead. However, this sentiment has been largely sidestepped in the last 10 years of the Modi government, with much of the action happening post the budget announcements. I think this is rightfully done because an aspiring economic superpower’s policy lens should not be limited to one event; rather, it should focus on virtues such as commitment, consistency, and vision for the short and medium term. To that effect, this budget is a winner in all these areas.

First, on account of commitment, it’s very important to note that the fiscal deficit glide path post-COVID has been continued with an estimate of 4.3 per cent of GDP in FY27. During COVID, the government’s fiscal deficit was at 9.2 per cent of GDP, and it had committed to bringing it down to the FRBM norms of 3 per cent through a glide path. Remarkably, they are maintaining this trend into 2026 despite providing significant personal income tax and corporate tax breaks in the previous years. This needs to be appreciated more than what has been done. Historically, post-independence, Bharat has been fiscally undisciplined for many decades, and this level of commitment to fiscal prudence has never been maintained. Moreover, in a global context, when even the advanced countries are struggling to control their fiscal impulses, this is a remarkable achievement. It’s also important to acknowledge that this has not been at the cost of ‘austerity’ in Western lingo, but rather on enhanced efficiency in addressing leakages through digitisation and more compliance in terms of direct tax returns, among other things.