BINAYAK DATTA
I was scouring this Budget for a thrilling and a new-di rectional discourse hidden somewhere, (now that the Un ion Government really had a husting-free, non-stop 4-year cruise ahead), and I got lost in a maze of small-small details, and big-big words and expres sions, announced in the most triumphant gusto, with a dash of a sauce here and a dash of salad there, of oft-repeated positive intentions (a-la-an ti-cigarettes taxes) quite well endured for a good 90-min ute-ritual, statedly this time a “Yuva Shakti Driven” initiative, but with nostalgic glimpses of the good-ole-days’ Budgets of yore! I thought I’ll structure my thoughts on the following lines, a) The Background this year, b) The Big Picture in the Budget; c) The Provi sions made; and d) Do these in some way add up to touch points to a Viksit Bharat of 2047 a $30trillion economy in 2047 (9 times of what we are today) with a per-capita of $18,000 ($2,900 today)… and with a spelt-out direction towards more equitable dis tribution amongst 1.4billion of us! a) The Background This Year: The Economic Survey aptly sums up our economic environment being influenced by external geopolitical ten sions, trade disruptions, and divergent outcomes across major economies. I missed mention of wide scale floods in the Himalayas and what the planners should do keep ing our hills safe, recommen dations on the unbridled fall of the rupee by more than 6% against the Dollar and by more than 20% against the Euro! And when inflation was only at just 1.33% in Novem ber ’25 against 5.2% last year. (Ministry of Strategic Plan ning & Program Implementa tion) (MoSPI). Shouldn’t the nominal GDP increase be read along this line? b) The Big Picture: We plan to spend a total of Rs 53 lakh crore (against actuals of 50 ac tuals last year); we plan Rs 18 lakh crore on salaries and es tablishments; Rs 5 lakh crore on major subsidies; 14 on Interest and we are left with only 16 for our development expenses in capex. And we can fund this by our own taxes and non-tax incomes of Rs 36 lakh crore, (against 34 of last year), leaving a deficit of Rs 17 lakh crore, (16 last year). This is covered by borrowings. Whilst there is a marginal increase in fresh borrowing, the overall Union Government debts (Rs 197 crore) debts to GDP ratios have increased to 55% from pre-Covid levels of 48%, This is not a good sign, we borrow more than we seem to grow! And remember these num bers are at historical costs of the dollar! I did not find quantifica tions so very essential of risks associated with falling exports and costlier imports in cases of unfavourable bilat eral tariffs imposed by differ ent countries. c) The Provisions: I think the statement on intentions is too varied, too wide-an gled and too open-ended. E.g. Scaling up manufacturing in 7 strategic and frontier sectors; rejuvenating legacy industrial sectors; creating “Champion MSMEs”; delivering a pow erful push to infrastructure; ensuring long-term energy security and stability; and developing city economic re gions, and the semiconductor mission 2.0…and from bio pharma to textiles, from ports to girls’ hostel for stem stu dents are all very routine and very essential Last year, the Finance Min ister had spoken of good qual ity schools and an increase in seats in medical colleges in the Budget. We now have 1.04 Lakh single-teacher schools with 34 lakh children! We now budgeted just Rs 1.39 lakh crore, only 2.6% of our total expenditure and less than half a percent of our GDP, in place of 6% recommended by the Kothari Commission’s in the NEP 2020. Similarly, on Health, the allocation is Rs 1.04 lakh crore, just about 2% of the Budget, and less than 1% of GDP, where the BRICS stand ards used to be 8%. I must add, education inflation (as per MoSPI, Nov ’25) was 3.38% and Health Inflation 3.60%, now there’s a degrowth! The big ticket increases apart from salaries and estab lishments are a) Interest Rs 12.7 lakh crore to Rs 14.0 lakh crore, pensions from Rs 2.9 lakh crore to Rs 3.0 lakh crore and defence including their pensions from Rs 5.7 to Rs 5.9 lakh crore. We often use the expression “reforms” a bit too leniently when we say we made 350 re forms. “Reform” to my mind is not a normal change; it means a radically new approach! I think we need urgent reforms in our governmental staff numbers and in our adminis trative structure particular ly in the years to come with more and more applications deploying AI. Incidentally, we spoke of an Indian large language AI model for De cember last; it’s still awaited, unless we change our mind in between! The increased security transaction tax on trade of fu tures and options was enough to bring down the Sensex 1,300 points, the intentions are good and fortunately good sense has prevailed in the market and the indices are mostly back on track. The minimum alternate tax provisions overall is positive, in the spirit of a simplified new regime, of taxation. But for companies in the old re gime those with huge credits accumulated would face dif ficulties in their annual plans as also in plans of mergers and acquisitions. We didn’t hear any more on the BRICS currency and we missed the new fertiliser manufacturing and import policies. Meanwhile, the fertil iser subsidies continue to be grossly under budgeted year to year. On the municipal bonds, I only hope the State govern ment is not the guarantor be cause most of them are peren nially overdrawn! Allocations in some of the other essential areas e.g. air pollution, space research, flood managements, etc, look to be too modest, I only hope whatever is allocated is spent for the purpose and does not end up spent on other heads or dying an end of term death! d) And before I part, if the title sheet referred to the “yuva” as the driving force, I couldn’t quite find hefty allo cations towards his benefits apart from upskilling which should not be restricted to yuva’s only – its AI which shall be the chief disruptor to com fort zones in Jobs! I remember Lucy Montgomery’s unforget table Anne of Green Gables, and her. “There’s one good thing in this world – there are always sure to be more springs!” (The author is a retired finance professional)
