Budget 2026: The Union Budget is often described as an annual plan. In practice, it is a test of whether the state can close access gaps at scale. For India, the priority remains connectivity—physical, digital, and financial—and the discipline lies in ensuring that no region or household is left outside the system.
That task does not exist in a vacuum. Budgets operate within hard fiscal limits that force choices, not aspirations. Reprioritisation implies displacement—between consumption subsidies and public goods, between short-term relief and long-term capacity. When fiscal space is thin, the state’s instinct is to announce widely and deliver thinly. That is not a moral failure; it is a budgetary one. A credible Budget signals not only what it will fund, but what it will not.
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This makes mapping needs in absolute numbers unavoidable. Allocations should follow that map, not precede it. Roads under PMGSY, all-weather village connectivity, drainage, water supply, and sewage are not independent line items. Together, they determine whether sanitation and mobility function. The same logic applies to financial access. An operational banking outlet within a five-kilometre radius—using post offices where banks do not exist—is not an administrative footnote. It separates nominal inclusion from usable access to savings, credit, and insurance.
The Budget’s role is to identify gaps, allocate for them, and review outcomes. But review without clarity on responsibility weakens quickly. Roads, schools, primary health centres, and agricultural extension sit largely with the states. The Centre can fund and design; it does not execute. Treating outcomes as centrally steerable obscures where capacity actually fails. Unless budgets recognise this divide and structure incentives and conditions accordingly, monitoring risks becoming ritual rather than corrective.
Employment beyond subsistence
Connectivity is a precondition, not an outcome. The next test is employment—work that is sustainable, not merely subsistence. Here again, signalling matters less than follow-through. Labour codes cannot remain suspended in consultation, particularly as the workforce shifts toward gig and platform employment. What is missing is not diagnosis, but execution.
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MSMEs face a similar constraint. Access to credit, infrastructure, and stable trade terms matters more than scattered incentives. Budgetary support routed through SIDBI must be judged by outcomes, not disbursement volumes. Export and import concessions linked to free trade agreements should be assessed for their employment impact, not treated as achievements in themselves. The Budget must state how these provisions translate into jobs, not just where money is parked.
India does not lack targets in this domain. It lacks consequence. Outcome tracking without ownership is informational, not disciplinary. Which ministry is answerable when MSME credit fails to generate employment, or when labour reform remains stalled? Until responsibility is explicit—through public benchmarks and visible course correction—execution will remain an aspiration, not a system.
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Education and health as capacity builders
Education spending cannot be treated as an aggregate number. The Budget must insist on mechanisms that ensure no child is excluded from schooling because of location, staffing gaps, or institutional failure. Every rupee should strengthen schools and teachers. That is how national capacity is built, not through headline allocations.
Health policy faces a similar risk. Shifting costs to insurance without strengthening primary health centres weakens outcomes. Preventive care and affordable curative services require a robust PHC network. Insurance can supplement this system; it cannot replace it.
Breaking silos, not adding schemes
The deeper weakness in budget design is fragmentation. Growth requires convergence across sectors, not parallel programmes. If manufacturing is the objective, the constraints are already known—quality of services, availability of medicines and doctors, access, and affordability. These are system failures, not sectoral ones.
Agriculture productivity illustrates the same point. India’s yields remain far below China’s despite smaller landholdings there. Strengthening agricultural universities and linking crop-specific research labs to farms is necessary, but insufficient if price signals, procurement incentives, and risk management remain unchanged. Productivity does not rise on knowledge alone; it responds to incentives.
These examples point to a common flaw. Budgets too often become number games, detached from outcomes. Objective targeting, recognition of fiscal constraint, clarity on who delivers, and visible correction are what turn intent into progress. Without these, slogans endure. Results do not.
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Dr Aruna Sharma is a New Delhi-based development economist. She is a 1982-batch Indian Administrative Service officer. She retired as steel secretary in 2018.