Budget Message: India's Economy Still Searching for Coherent Growth Plan
As Finance Minister Nirmala Sitharaman concluded her Budget presentation, a pressing question emerged amidst the numerous announced schemes: Where is the substantial economic growth, and where are the promised jobs? The government deserves recognition for its aggressive pursuit of free trade agreements, but these international deals cannot serve as substitutes for the deep structural reforms that India's economy fundamentally requires.
Failed Promises in Job Creation Initiatives
Two budgets ago, the government unveiled the Employment Linked Incentives scheme—a massive Rs 2 lakh crore package that pledged to generate 4.1 crore new jobs. However, cabinet approval took an entire year, and the schemes only became operational in August 2025. To date, there remains no verifiable evidence of even a single new job created through this initiative.
The PM Internship Scheme, which aimed to provide 1 crore internships over five years, has yielded equally disappointing results. Only 1.65 lakh offers materialized, with merely 16,000 participants showing up. Among those, 41 percent quit prematurely, and a mere 95 received job offers. Consequently, the allocation for this program was slashed by 95 percent, with the government attributing the failure to young Indians' reluctance to travel beyond 5 kilometers for opportunities.
Industrial Policy Shortcomings and Implementation Failures
The Production Linked Incentive scheme reveals a similar pattern of underperformance. Of the Rs 1.97 lakh crore committed across 14 sectors, barely 12 percent has actually been disbursed. Apple's contract manufacturers absorbed three-quarters of the mobile manufacturing incentives, while domestic players consistently missed their targets. Furthermore, China has challenged India at the World Trade Organization for imposing local sourcing conditions, effectively reducing subsidies to rewarding mere assembly rather than fostering genuine manufacturing capabilities.
A particularly alarming revelation comes from a CAG report concerning the Pradhan Mantri Kaushal Vikas Yojana. Despite Rs 10,000 crore spent on skilling one crore youth, 94.5 percent of beneficiary bank accounts were found to be invalid, blank, or dummy accounts—amounting to ninety lakh ghost accounts. In previous administrations, such findings would have triggered comprehensive national investigations.
The Fundamental Flaw: Campaign Mode Versus Maintenance Mode
The core issue extends beyond individual scheme failures. The government appears to approach industrial policy as if it were distributing gas cylinders—operating in campaign mode where resources are allocated, implementation occurs once, and announcements dominate television coverage. Genuine industrial policy requires maintenance mode: persistent, iterative efforts demanding deep expertise sustained over years.
Excessive centralization within the PMO means policies are frequently driven by generalist bureaucrats who lack both specialized training and appropriate incentives to achieve optimal outcomes. This creates a self-perpetuating cycle where competence is systematically sidelined by centralized control.
Rhetoric Versus Reality in Budget Language
While the word "scheme" decreased from 60 mentions in the 2024 Budget speech to 34 this year, a new favorite term emerged: "Will," appearing 190 times throughout the presentation. Phrases like "will augment our growth" and "government will undertake" dominated the rhetoric. The most Kafkaesque moment arrived when the Finance Minister announced, "A High-Level Committee... will be set up," met with thundering applause. India now celebrates the will of a will-be committee, highlighting the gap between promise and execution.
Squandered Opportunities and Declining Investment
This disconnect matters profoundly because the ongoing restructuring of the global economic order has presented India with a once-in-a-generation opportunity to integrate into international supply chains and expand exports beyond merchandise to include expert services delivered digitally. Yet net Foreign Direct Investment has crashed by 96 percent to just $0.4 billion in FY25—the lowest figure on record.
Nowhere is this squandering more visible than in the semiconductor sector. Fabrication spending fell from Rs 2,500 crore to Rs 1,000 crore in revised estimates, while display fabrication shows zero expenditure. The Tata-PSMC fabrication facility in Gujarat has pushed its timeline to mid-2027, Zoho shelved its fabrication plans in Karnataka, and TSMC declined India's invitation entirely. Most tragically, India's head start in chip design—where 20 percent of the world's designers work from the country—is being allowed to dissipate without strategic nurturing.
A Nation Between Aspiration and Achievement
Skimming post-Budget coverage reveals drooping shoulders behind the applause—resignation dressed as celebration. This recalls Mark Carney's Davos speech invoking Havel's greengrocer who displays signs he doesn't believe in. Carney urged companies and countries to "take their signs down," prompting reflection on when Indian analysts might similarly embrace candor.
A middle power that mistakes aspiration for achievement inevitably makes policy for a country that does not exist. After the first Budget of Modi 3.0, questions were raised about whether the economy had a coherent plan and if sufficient audacity existed within the governing machinery to follow its stated economic dharma. The jury remains out, watching as India's economic direction continues to unfold with more promises than proven results.
