The budget’s horizon is closer: Just as our growth challenge needs it to be

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Subscribe to enjoy similar stories. Ever since India’s government set the goal of a Viksit Bharat by 2047, Union budgets have been bifocal. Massive outlays for an infrastructure build-up have been emblematic of this approach, designed to spur demand and multiply incomes during the year on one hand, while also acting as a long-term enabler of GDP expansion on the other.

So, too, India’s budget proposals for 2025-26, presented by finance minister Nirmala Sitharaman. The big difference this time, though, was an economic slowdown in 2024-25. In one analysis, this was the result of a foot taken off the spending pedal by the government, an election hitch that revealed just how heavily growth depends on it, even as credit growth flagged.

In another analysis, a post-pandemic upspring exhausted itself, even as a K-shaped recovery began to hurt, with an upper-end boom no longer masking the mass stagnation in wages that held back private consumption and investment. As these two need to form a virtuous cycle of mutual support, this budget had to focus more on the near-term than usual to aid the economy. And that too in a global context of new risks and uncertainty.

Impact immediacy has been the 2025-26 budget’s foremost priority. In response to signs of an economic slump, Sitharaman unveiled a direct stimulus in the shape of tax relief aimed at leaving more money with consumers who drive sales trends. Personal income-tax slabs have been elevated and spaced further apart.