Opinion From the Budget, a message: India’s economy is still in search of a plan
Government deserves credit for aggressively pursuing FTAs. But they cannot be a substitute for structural reforms, which cannot be delivered in ‘campaign mode’.
Union Minister for Finance Nirmala Sitharaman poses with her team for a photo op before leaving to present the Budget in New Delhi on Sunday. (Express Photo by Tashi Tobgyal) As the Finance Minister wrapped up her Budget speech, all I could think was: While there are schemes galore, where is the growth, where are the jobs?
Two budgets ago, the FM announced Employment Linked Incentives — a Rs 2 lakh crore package promising 4.1 crore jobs. Cabinet approval took a year; the schemes became operational only in August 2025. We are still waiting for evidence of a single new job. The PM Internship Scheme — 1 crore internships in five years — saw 1.65 lakh offers; only 16,000 showed up; 41 per cent quit; 95 received job offers. The allocation was slashed by 95 per cent. The government’s explanation? Young Indians are reluctant to travel more than 5 km.
The Production Linked Incentive scheme tells a similar story. Of Rs 1.97 lakh crore committed across 14 sectors, barely 12 per cent has been disbursed. Apple’s contract manufacturers absorbed three-quarters of mobile incentives; domestic players missed targets. China has challenged India at the WTO for imposing local sourcing conditions, reducing our subsidies to rewarding assembly rather than genuine manufacturing.
Meanwhile, a CAG report revealed that under the Pradhan Mantri Kaushal Vikas Yojana — Rs 10,000 crore spent on skilling one crore youth — 94.5 per cent of beneficiary bank accounts were invalid, blank, or dummy. Ninety lakh ghost accounts. In another era, this would have launched a national investigation.
The problem runs deeper than any single scheme. The government thinks industrial policy works like providing gas cylinders — campaign mode, where you put up resources, implement once and announce it on television. But serious industrial policy is maintenance mode — persistent, iterative, demanding deep expertise over years. Centralisation in the PMO means policy is driven by generalist bureaucrats with neither the training nor the incentives to get it right. The result is a self-fulfilling cycle — competence is sidelined by control.
To be fair, the word “scheme” declined from 60 mentions in the 2024 speech to 34 this year. But I found a new favourite: “Will”, appearing 190 times. “Will augment our growth”, “government will undertake”. The Kafkaesque moment came when the FM announced, “A High-Level Committee… will be set up,” to thundering applause. We celebrate the will of a will-be committee.
This matters because the rejigging of the global order has handed India a once-in-a-generation opportunity — to integrate into supply chains, to export not just merchandise across oceans but expert services across the ether. The government deserves credit for aggressively pursuing free trade agreements. But FTAs cannot substitute for structural reforms that campaign mode cannot deliver. Net FDI has crashed 96 per cent to $0.4 billion in FY25 — the lowest on record.
Nowhere is the squandering more visible than in semiconductors. Fab spending fell from Rs 2,500 crore to Rs 1,000 crore in revised estimates; the display fab shows zero expenditure. The Tata-PSMC fab in Gujarat has pushed its timeline to mid-2027. Zoho shelved its fab plans in Karnataka. TSMC declined India’s invitation. The saddest part is that our head start in chip design — 20 per cent of the world’s designers work from India — is being allowed to go to waste.
Skimming the post-Budget coverage, I noticed drooping shoulders behind the applause — resignation dressed up as celebration. It reminded me of Mark Carney’s speech at
Davos, where he invoked Havel’s greengrocer — the one who displays signs he does not believe in. “It is time,” Carney said, “for companies and countries to take their signs down.” I wondered when these esteemed analysts on Indian TV would put their sign down, when they would tell the truth. A middle power that mistakes aspiration for achievement will make policy for a country that does not exist.
After the first Budget of Modi 3.0, I had argued in these pages that the economy was in search of a plan and wondered if there was enough audacity in the Modi machinery to follow its dharma. The jury is still out.
The writer is an economist at Cornell University
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