Former RBI Governor Calls for Strategic Budget Focus on Long-Term Economic Resilience
In a significant statement, former Reserve Bank of India Governor Raghuram Rajan has highlighted the critical need for India's budget to adopt a longer-term vision to enhance the economy's resilience. Rajan pointed out that historically, even when India had structured five-year plans, the national budget often failed to integrate effectively with these broader strategic frameworks.
Historical Disconnect Between Budget and Planning
Rajan elaborated on the historical context, noting that India's budgetary processes have frequently operated in isolation from long-term planning initiatives. He mentioned that during the era of five-year plans, which were designed to guide the country's developmental trajectory, the annual budget did not always align seamlessly with these overarching goals. This lack of integration, according to Rajan, has hindered the economy's ability to build sustained resilience against global and domestic shocks.
Emphasis on Future-Oriented Fiscal Policies
The former RBI chief stressed that moving forward, the budget must prioritize a forward-looking approach. He argued that by focusing on longer-term objectives, such as infrastructure development, skill enhancement, and technological innovation, the Indian economy can become more robust and adaptable. Rajan's comments come at a crucial time as policymakers prepare for the Union Budget 2026, urging them to consider how fiscal measures can support enduring economic stability and growth.
Key Recommendations for Budget 2026
Rajan's insights suggest several areas where the budget could improve integration with long-term vision:
- Aligning expenditure with strategic sectors identified in national development plans.
- Enhancing transparency and accountability in budget allocations to ensure they contribute to resilience-building.
- Fostering collaboration between fiscal policy and other economic initiatives to create a cohesive framework.
Overall, Raghuram Rajan's remarks underscore the importance of a holistic and visionary budget to fortify India's economic foundations for the future.
