India’s Budget: Where is the Growth Plan?

The recent Budget speech delivered by the Finance Minister has sparked significant concern regarding India’s economic trajectory. As the speech concluded, many were left pondering the absence of concrete growth and job creation. Despite an array of schemes, the expected outcomes remain elusive, prompting questions about the effectiveness of these initiatives.

Two budgets ago, the government announced the Employment Linked Incentives program, a massive Rs 2 lakh crore initiative aimed at creating 4.1 crore jobs. However, a year’s delay in cabinet approval meant these schemes only became operational in August 2025, and to date, there is still no evidence of new job creation. Similarly, the PM Internship Scheme promised 1 crore internships over five years, yet only 1.65 lakh offers were made, with a staggering 41 percent of interns quitting.

The Production Linked Incentive scheme reveals a similar story of underperformance. Of the Rs 1.97 lakh crore committed across 14 sectors, only 12 percent has been disbursed. Domestic manufacturers have struggled to meet targets, while international players have benefited disproportionately. Moreover, India’s local sourcing conditions have led to disputes with China at the WTO, stalling genuine manufacturing growth.

A recent report by the Comptroller and Auditor General highlighted alarming inefficiencies under the Pradhan Mantri Kaushal Vikas Yojana, revealing that 94.5 percent of beneficiary bank accounts were invalid or fictitious. This raises serious concerns about accountability and transparency in government schemes.

The challenge extends beyond individual schemes. The centralization of policy-making within the Prime Minister’s Office has led to governance by generalist bureaucrats lacking specialized training. This has created a cycle where competence is overshadowed by control, resulting in ineffective industrial policies.

Despite a notable reduction in mentions of “scheme” in the Budget speech, the term “will” appeared 190 times, indicating aspirations without substantial action. The announcement of a new High-Level Committee was met with applause, symbolizing a culture of celebration without real achievements.

India stands at a critical juncture, with a unique opportunity to integrate into global supply chains. However, the failure to implement structural reforms undermines these prospects. The drastic 96 percent drop in net foreign direct investment (FDI) reflects a worrying trend.

In sectors like semiconductors, the situation is dire. Planned investments have significantly decreased, and major companies are reconsidering their commitments to India. This is particularly troubling given India’s potential in chip design, where a significant portion of the world's designers are based.

As analysts reflect on the post-Budget scenario, a sense of resignation is palpable. The disconnect between aspirations and achievements poses a threat to India’s economic future. The government must recognize that without a coherent and actionable plan, the economy will continue to languish in uncertainty.