Viewed through this lens, the Union Budget presented in Parliament today reflects both the strengths and the limitations of India’s current governing imagination. It is a competent, stabilising, and politically aware budget. Yet it stops short of the deeper economic reforms required to truly revitalise the Indian system.
The Budget demonstrates that the Indian state has learned to manage scale. Fiscal prudence, targeted welfare delivery, infrastructure spending, and macroeconomic stability are no longer episodic achievements; they have become part of administrative routine. This matters. A state that cannot maintain macro stability cannot claim strategic autonomy.
In that sense, the Budget signals continuity, reassurance to markets, and confidence in India’s growth trajectory. It recognises that disorder is costly, and that credibility—domestic and global—is itself a form of national power.
But thinking like a state also requires confronting structural constraints rather than navigating around them. Here the Budget is cautious to a fault. Economic revitalisation does not come from incremental allocation alone; it comes from reforming the underlying architecture of incentives, institutions, and productivity.
India’s economy continues to suffer from well-known bottlenecks: rigid factor markets, fragmented regulation, uneven state capacity, and a private sector that is often risk-averse because the cost of failure remains high. A reformist budget would have treated these not as background conditions, but as central policy problems.
The absence is most visible in the realm of economic freedoms. A state that thinks long-term must trust its citizens and enterprises to create value, while reserving its coercive power for rule enforcement rather than routine control. Yet India’s regulatory ecosystem still leans toward permission rather than facilitation, compliance rather than competition.
Tax rationalisation, labour flexibility, judicial efficiency, and genuine ease of exit for firms remain politically sensitive but economically indispensable. Without addressing these, growth risks becoming extensive rather than transformative.
At the same time, it would be unfair to dismiss the Budget as unimaginative or timid. Governing a diverse democracy requires sequencing as much as conviction. Rapid reform without social absorption can generate instability, which in turn erodes state legitimacy.
The Budget’s emphasis on welfare continuity, employment-linked incentives, and public investment reflects an awareness that economic policy is also social policy. A state that thinks only in terms of markets, and not social cohesion, misunderstands its own foundations.
Yet the deeper question remains unanswered: what kind of economy is India trying to become over the next two decades? A manufacturing hub integrated into global value chains? A services-led innovation economy? A continental market driven by domestic demand? Budgets that think like a state articulate direction as much as distribution.
They signal which sectors will be freed, which protected, which disrupted, and which allowed to fail. In this Budget, the signals are reassuring but diffuse.
To think like a state is also to accept that reform is not an event but a discipline. It involves political risk, administrative overhaul, and the willingness to absorb short-term discomfort for long-term resilience. The Indian state today is capable, confident, and increasingly centralised—but it remains reform-shy at the margins where true productivity gains lie. Stability has been mastered; transformation remains deferred.
The Budget, then, is best read as a holding operation by a state conscious of its responsibilities but cautious of its reach. It keeps the system running, but does not yet rewire it.
That may be sufficient for sustaining growth in the near term. It is unlikely to be enough for revitalising India’s economic system in a world where competitiveness is relentless and complacency is expensive. Thinking like a state ultimately means asking not only what is affordable today, but what is unavoidable tomorrow.