In the journey to Viksit Bharat, faster growth for a labour-abundant country such as India can be achieved by having more workers operating at higher levels of productivity. Seen in this light, this budget reflects a balanced and forward-looking approach.
It aligns immediate fiscal choices with a longer-term development vision while strengthening India's position in the global economy. Above all, it reflects confidence in India's capacity to sustain high growth, deliver opportunity across regions, and continue its journey towards a more prosperous and inclusive future, guided by the spirit of the budget speech's third kartavya: 'Sabka saath, sabka vikas.'
With a young and expanding workforce, India stands at a rare moment of opportunity. From 2017-18 to 2023-24, nearly 17 cr jobs have been added, reflecting robust employment generation. And yet, as Periodic Labour Force Survey (PLFS) data reveal, there is a vast scope for expanding the labour force by raising India's female labour force participation rate (FLFPR).
Challenges remain. In 2020, ILO data showed that an American worker was nearly 9x more productive than an Indian worker while China had doubled its productivity in the preceding decade. So, the challenge is to add more workers while raising their average levels of productivity. This is an important challenge for the economy, as exemplified by the budget's variety of initiatives.
Public investment remains a key driver of growth. Capex has been raised from around Rs 11 lakh cr to over Rs 12 lakh cr. This sustained emphasis on infra strengthens productive capacity, improves connectivity and attracts private investment over time. At the same time, continuation of essential welfare programmes supports social resilience and ensures that growth remains broad-based and inclusive.
Fiscal management and good governance remain cornerstones of GoI's approach. The fiscal framework continues to evolve towards a comprehensive focus on debt sustainability while maintaining discipline in annual balances. The debt-to-GDP ratio is estimated at 55.6% in BE 2026-27, compared to 56.1% in RE 2025-26. Fiscal deficit is estimated at 4.4% of GDP in RE FY2025-26 and is budgeted to decline further to 4.3% in BE FY 2026-27.
Narendra Modi has emphasised that India, as a growing economy with expanding trade and capital needs, must remain integrated with global markets: exporting more and attracting stable, long-term investment. This budget, accordingly, aligns domestic policy priorities with India's expanding engagement through major trade and investment agreements.
By strengthening India's integration into global value chains in areas of strategic importance, the budget complements efforts to deepen trade partnerships, particularly with the EU. A focused push for pharma, rare earths and India Semiconductor Mission 2.0 enhances India's position as a reliable and trusted partner in critical international supply chains, including active pharmaceutical ingredients, EVs and data centres for AI.
A renewed emphasis on the textile sector further reinforces this outward-looking growth strategy and aligns closely with India's EU trade engagement. It also advances the second kartavya of fulfilling aspirations and building capacity by expanding female labour force participation through employment opportunities closer to home, thereby unlocking a large and underutilised source of growth.
The budget documents - and Economic Survey - have pegged India's potential growth rate at around 7%. Yet, we know that growth needs to be faster than this to meet India's 'Viksit Bharat' goals of becoming an advanced economy by 2047. This will require higher investment, including from abroad. It is for this reason that the attention given to the financial sector is so important and prescient. All in all, it is a coherent, responsible package at a crucial time.
Budget 2026 Live
Your 2-minute guide to becoming a Budget pro
Check what gets cheaper and costlier in Budget this year
How far has India come since the last money manual
With a young and expanding workforce, India stands at a rare moment of opportunity. From 2017-18 to 2023-24, nearly 17 cr jobs have been added, reflecting robust employment generation. And yet, as Periodic Labour Force Survey (PLFS) data reveal, there is a vast scope for expanding the labour force by raising India's female labour force participation rate (FLFPR).
Challenges remain. In 2020, ILO data showed that an American worker was nearly 9x more productive than an Indian worker while China had doubled its productivity in the preceding decade. So, the challenge is to add more workers while raising their average levels of productivity. This is an important challenge for the economy, as exemplified by the budget's variety of initiatives.
Public investment remains a key driver of growth. Capex has been raised from around Rs 11 lakh cr to over Rs 12 lakh cr. This sustained emphasis on infra strengthens productive capacity, improves connectivity and attracts private investment over time. At the same time, continuation of essential welfare programmes supports social resilience and ensures that growth remains broad-based and inclusive.
Fiscal management and good governance remain cornerstones of GoI's approach. The fiscal framework continues to evolve towards a comprehensive focus on debt sustainability while maintaining discipline in annual balances. The debt-to-GDP ratio is estimated at 55.6% in BE 2026-27, compared to 56.1% in RE 2025-26. Fiscal deficit is estimated at 4.4% of GDP in RE FY2025-26 and is budgeted to decline further to 4.3% in BE FY 2026-27.
Narendra Modi has emphasised that India, as a growing economy with expanding trade and capital needs, must remain integrated with global markets: exporting more and attracting stable, long-term investment. This budget, accordingly, aligns domestic policy priorities with India's expanding engagement through major trade and investment agreements.
By strengthening India's integration into global value chains in areas of strategic importance, the budget complements efforts to deepen trade partnerships, particularly with the EU. A focused push for pharma, rare earths and India Semiconductor Mission 2.0 enhances India's position as a reliable and trusted partner in critical international supply chains, including active pharmaceutical ingredients, EVs and data centres for AI.
A renewed emphasis on the textile sector further reinforces this outward-looking growth strategy and aligns closely with India's EU trade engagement. It also advances the second kartavya of fulfilling aspirations and building capacity by expanding female labour force participation through employment opportunities closer to home, thereby unlocking a large and underutilised source of growth.
The budget documents - and Economic Survey - have pegged India's potential growth rate at around 7%. Yet, we know that growth needs to be faster than this to meet India's 'Viksit Bharat' goals of becoming an advanced economy by 2047. This will require higher investment, including from abroad. It is for this reason that the attention given to the financial sector is so important and prescient. All in all, it is a coherent, responsible package at a crucial time.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Suman Bery
The writer is vice-chairman, NITI Aayog